FX.co ★ Euro Remains Above $1.08 After Inflation Data

The euro maintained a position slightly above $1.08 as investors assessed important inflation data and its potential impact on the European Central Bank's (ECB) policy direction. This comes in anticipation of reciprocal U.S. tariffs scheduled to be implemented on April 2. Consumer price inflation in the Eurozone decreased to 2.2% in March, reaching its lowest point since November 2024, primarily due to a deceleration in service price growth. Concurrently, core inflation dropped more significantly than anticipated, falling to 2.4%, its lowest level since January 2022. With decreasing inflationary pressures and rising global trade tensions, speculation increased that the ECB might reduce interest rates by 65 basis points this year. Despite these challenging conditions, the euro appreciated by 3% in the past month, buoyed by widespread dollar weakness amid evolving U.S. tariff strategies under the Trump administration and Germany's endorsement of a substantial fiscal package.