Euro steadies ahead of ECB decision as oil shock fuels inflation fears

The euro remains firm near a two-week high as markets position for the European Central Bank's policy decision. Traders widely expect another 25-basis-point rate increase, but the guidance around future policy could be more important for EUR/USD.

The renewed surge in oil prices is complicating the inflation outlook. Brent crude has remained above $100 a barrel as Middle East tensions threaten energy shipments, increasing the risk that higher fuel costs feed into broader inflation.

The euro's resilience is notable despite the energy shock, while investors also await US inflation data that could influence Federal Reserve rate expectations. A stronger-than-expected US inflation reading could support the dollar and limit EUR/USD gains.

For traders, the ECB decision, energy prices and upcoming US inflation figures are likely to remain the key drivers of euro direction.