The euro rebounded above $1.17, supported by a softer US dollar following weak US manufacturing data, and as investors largely shrugged off the US capture of Venezuelan President Nicolás Maduro. In Europe, economic data pointed to an unexpected slowdown in French inflation in December. The EU-harmonized index of consumer prices, closely monitored by the European Central Bank when setting monetary policy, rose 0.7% year on year, the weakest reading since May and below market expectations of a 0.8% increase. The figures are unlikely to materially alter market expectations for ECB policy. Last month, the central bank signaled that interest rates are likely to remain on hold, citing resilient economic growth and inflation close to its target. In the US, meanwhile, attention is turning to President Trump’s expected nomination of a new Federal Reserve chair in May, which has raised the prospect of a more dovish policy stance.
