FX.co ★ Euro Holds Above $1.11 as Investors Digest Key Data

The euro remained strong above the $1.11 threshold on Tuesday, as it sought to recover from Monday's 1.5% decline. This movement came as investors processed a combination of better-than-anticipated German economic sentiment data and an unexpected drop in US inflation figures. Specifically, Germany's ZEW Economic Sentiment Index surged to 25.2 in May, markedly surpassing the forecasted 11.9. This boost reflects increased optimism for the upcoming six months, fueled by the establishment of a new federal government, advancements in resolving trade disputes, and indications of stabilizing inflation rates. In contrast, the US dollar experienced a downturn following April's consumer price inflation easing to 2.3%, the lowest rate since February 2021 and marginally under the expected 2.4%. Meanwhile, core inflation remained steady at 2.8% year-over-year, aligning with a four-year low. Furthermore, investors continued to evaluate the ramifications of the recent US-China tariff rollback announcement, which temporarily reduces tariffs to 30% and 10% over a 90-day period, as part of ongoing trade negotiations.