The euro edged slightly lower but stayed range-bound as markets weighed a steady dollar against a stable ECB outlook. ECB President Lagarde said inflation is in a “good place,” but strong US jobs data has capped euro upside, leaving US CPI as the next key catalyst—weak data could lift EURUSD above 1.1929, while a strong print risks a move toward 1.1766. In Europe, upcoming CPI, GDP, and trade data are expected to confirm steady growth and easing price pressures, with these releases, alongside US inflation, guiding near-term direction for the euro.

The pair is edging toward ending a four-day slide but is still down a nice amount on the week, as markets react positively to PM Takaichi’s fiscal agenda. Her decisive election win has boosted confidence in higher government spending and tax cuts, supporting growth expectations and giving the Bank of Japan more room to gradually normalize policy. At the same time, firm rhetoric from Japanese officials on curbing FX volatility has underpinned the yen, with a break below 152.10 opening the door to further gains—especially if US CPI comes in weaker than expected.

The Australian dollar is slightly lower, extending Thursday’s decline, but remains close to a 3.5-year high around 0.7150. The RBA struck a hawkish tone, with Governor Bullock signaling a willingness to raise rates again if inflation stays sticky, reinforced by a jump in inflation expectations to 5% in February. As a result, markets are increasingly pricing in a possible rate hike in May, pending upcoming inflation, jobs, and GDP data.