Euro Faces Pressure Ahead of ECB Rate Cut Decision

The euro is under pressure against the US dollar as markets anticipate a dovish stance from the European Central Bank (ECB), which is expected to cut rates by 25 basis points to 2.75% amid a weak EU economy. Analysts have warned that the euro area's inflation is declining, raising concerns about sustained inflation undershooting. Meanwhile, the dollar has shown mixed performance following the Federal Reserve's decision to maintain interest rates, with Chair Jerome Powell suggesting there is still room for cuts. The euro has recently traded flat around $1.0425, with some support at $1.0380, but is likely to face additional pressure if ECB President Christine Lagarde confirms a dovish outlook. Consumer confidence in Germany has also dropped significantly, contributing to concerns about the broader eurozone economy. Overall, the outlook suggests further euro weakness as investors bet on the diverging paths of the US and European central banks.