EUR/USD Boosted as ECB June Rate Hike Nearly Sealed Amid Inflation

EUR/USD is receiving bullish support as sources indicate the European Central Bank views a June rate hike as nearly certain, reinforcing hawkish expectations for the euro. According to a Reuters report circulating among traders, ECB officials see persistent high energy costs as a key driver keeping inflation pressures elevated across the Eurozone, necessitating further monetary tightening. The central bank is expected to avoid pre-committing to a July hike, preferring to maintain a data-dependent stance that preserves policy flexibility. Inflation risks have intensified as elevated energy prices, compounded by geopolitical uncertainty with no visible peace agreement involving Iran, continue to pressure the outlook. For EUR/USD traders, the hawkish ECB posture contrasts with market expectations around Federal Reserve policy, potentially widening the interest rate differential in the euro's favor. Near-term, traders should monitor upcoming Eurozone inflation prints and energy market developments for confirmation of the rate hike trajectory. A confirmed June hike would likely provide additional upside momentum for the euro against the dollar.