The ECB remains well-positioned to keep rates steady as wage growth trends lower, reinforcing confidence in inflation returning to target and supporting EUR/USD’s ongoing uptrend, BBH FX analysts report, BBH FX analysts report.

Negotiated wage growth seen slowing toward 2% target

"The ECB remains in a good place to keep rates hold. The ECB’s negotiated wage tracker points to lower and more stable wage pressures consistent with the ECB’s 2% inflation target."

"The wage tracker with unsmoothed one-off payments - which closely matches the ECB’s indicator of negotiated wages - indicates an average negotiated wage growth of 2.9% y/y over 2025 vs. 4.8% in 2024 and easing further to 2.4% for the first half of 2026. Bottom line: ECB/Fed policy stance continues to underpin the uptrend in EUR/USD."