Euro Sneaks Up 0.1% Against the Dollar – A Quiet Victory
On Friday, the euro politely slipped up by just 0.1%, hovering at 1.07972 against the US dollar. It’s eyeing a break after four consecutive days of drudging downwards.
Inflation in the US: The Big Story Behind the Euro’s Tiny Upswing
US inflation, measured by the core Personal Consumption Expenditure (core PCE) index, eased in February exactly as economists had penciled in.
- Annually, core PCE fell to 2.8% from 2.9% in January.
- Monthly, it settled at 0.3% versus 0.5% the previous month.
- Both numbers nudged toward the Fed’s belatedly sane target of around 2%.
Despite the market’s low liquidity due to Good Friday closures, the euro managed to seize the moment—the market’s a spectator sport, anyway!
What Does This Mean For the Fed?
Fed officials are still keeping their options open. The CME FedWatch Tool says there’s about a 61% chance of a rate cut in June versus a 36% chance of holding steady.
Expectations remain rooted in the belief that a sustained slowdown in core inflation indicates a steady path toward the 2% goal. Even with Friday’s numbers, expectations are unlikely to march to the drum of surprise inflation or labor figures.
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