Inflation expectations in Europe have fallen below 2%, prompting speculation that the European Central Bank (ECB) may cut interest rates below this threshold. The EUR/USD exchange rate is currently at 1.03, indicating a continued decline of the euro against the dollar. Analysts suggest that the ECB's fiscal policies and a political inclination towards increased debt will contribute to the euro's ongoing depreciation. Upcoming inflation data from Germany and France, set to be released on Monday, will be crucial in assessing the ECB's potential for further rate cuts. Any indications of easing inflation could provide the ECB with the necessary leeway to adjust rates, particularly as markets anticipate that the ECB may need to cut rates more aggressively than the Federal Reserve.