Could higher US inflation boost euro’s international role?

Dollar balloon

Divergent inflation readings in the US and the eurozone could be one factor that boosts investor demand for a safe alternative to the US dollar.

After rising quickly in the first few months of 2021, inflation in the eurozone is forecast to have declined to 1.9% in June, exactly on target. However, in the US, the personal consumption expenditures price index (PCE) – the Federal Reserve’s preferred measure of inflation – rose year on year by 3.9% in May, well above target.

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