FX.co ★ Euro Little-Changed as Investors Assess PMI Data and ECB Rate Cut Signals

The euro maintained its position above the $1.08 level, lingering just below the five-month peak of $1.095, achieved on March 18th. This stability comes as investors evaluated the latest PMI data and comments from European Central Bank (ECB) officials. Recent surveys revealed that the Eurozone's private sector activity expanded at its quickest pace since August. However, this growth did not meet market expectations, as an uptick in manufacturing output was partially offset by a deceleration in the services sector. In the meantime, ECB official Cipollone suggested that the justification for a rate cut is gaining traction, with inflation possibly decelerating more quickly than previously expected. This view was supported by his colleague Stournaras, who stated on Friday that all indicators are pointing towards a rate cut in April. Furthermore, President Lagarde highlighted potential weaker economic growth but minimized inflation concerns if the EU should choose to respond to US tariffs, indicating that the ECB would refrain from increasing rates. ECB’s de Galhau also reiterated that the central bank still has the capacity to further lower borrowing costs.