EUR/USD: PCE Prices Weekly Highlight
- The euro has continued to consolidate against the dollar, supported by the growing expectation that Germany will ease its budgetary constraints.
- Claudia Panseri, Chief Investment Officer at UBS WM France, noted that The structural changes in fiscal policy in Europe, more particularly in Germany, are surely important factors that...
- Market observers are also watching April 2 for potential new U.S.
Euro Consolidates Against Dollar Amid Economic Factors
Table of Contents
Published: March 26, 2025
The euro has continued to consolidate against the dollar, supported by the growing expectation that Germany will ease its budgetary constraints.
Claudia Panseri, Chief Investment Officer at UBS WM France, noted that The structural changes in fiscal policy in Europe, more particularly in Germany, are surely important factors that have triggered the Haussier Movement of the single currency.
She added, Although the announced plans are still preliminary, they reflect an increasing desire for European leaders to increase military spending in response to the reduction of the United States’s engagement in European defense affairs and help from Ukraine.
Market observers are also watching April 2 for potential new U.S. customs taxes based on reciprocity. The Wall Street Journal reports that some sectors might be excluded from thes surcharges.
César Perez Ruiz, head of investments and CIO at Pictet Wealth Management, said that The wait-and-see attitude will dominate before the declaration by Donald Trump, on April 2, of reciprocal customs duties potentially followed by retaliatory measures from the trade partners of the United States.
He highlighted the importance of the Personal Consumption Expenditures (PCE) inflation data, stating, Basic PCE inflation, the Fed anticipating a delay in the disinflationary trend this year, partly due to customs duties.
He also mentioned the European union’s postponement of 50% customs duties on American whiskey to mid-April, which leaves a margin of negotiation.
The Federal Reserve’s position is becoming more complex, as indicated by the recent Federal Open Market Committee (FOMC) meeting.
Decrease in growth, increase in inflation … The Fed is taken between two fires and, if not knowing on which foot to dance, it prefers not to over-react and it has the means.Jerome Powell absolutely wants to avoid starting up on a restrictive monetary policy, the effects of which take time to spread in the economy, while the ambient uncertainty and the impacts of customs duties could only be passengers. the fact that FOMC members anticipate two drops of guiding rates by the end of the year while inflation could be perceived as a market financiers who rather welcomed the news.Thomas giudici,head of the bond management of AURIS GESTION
The IFO index of the business climate in Germany was released at 86.7, close to expectations. A tool indicates a shift from “crisis” to “recovery.” Consumer confidence data from the U.S. is also being closely watched, especially given inflationary concerns related to expansionist and anti-immigration policies.
At midday,the euro was trading at $1.0820.
Key Graphics Elements
Volatility around $1.0608 has altered the currency pair’s configuration, validating support on a 50-day moving average. A rapid decline toward parity (€1 = $1) is now less likely. Consolidation is occurring near the 20-day moving average amid tightening Bollinger bands.
Medium Term Outlook
A neutral outlook is maintained for the euro-dollar parity (EURUSD) in the medium term.
This neutral stance will remain provided that EURUSD prices stay between support at $1.0758 and resistance at $1.1012.
Daily Data Graphics
Graphic created using ProRealTime software.
Euro Consolidates Against Dollar: What’s Driving the Movement?
Published: March 26, 2025
The euro (EUR) has recently been consolidating against the U.S.dollar (USD). This article explores the key factors influencing this movement, providing insights into the current market dynamics and future outlook.
what is Causing the Euro to Consolidate Against the Dollar?
The euro’s consolidation against the dollar is primarily due to several intersecting economic factors. These include:
Anticipation of Easing Budgetary Constraints in Germany: The expectation that Germany might ease it’s fiscal policies is a significant driver, influencing the single currency.
Fiscal Policy Changes in Europe: Structural changes in European fiscal policy, notably in Germany, are key factors. Claudia Panseri, Chief Investment Officer at UBS WM France, highlighted the importance of these changes, suggesting they “have triggered the Haussier movement of the single currency.”
Increased Military Spending: There’s a growing desire among European leaders to increase military spending, which may be influenced by a decrease in the U.S.’s involvement in European defense and the ongoing support provided to Ukraine.
What is the Outlook for Euro-Dollar Parity (EURUSD)?
The medium-term outlook for the EURUSD pair is neutral. This neutral stance is expected to remain as long as prices stay within the range of:
Support: $1.0758
Resistance: $1.1012
Are There Any Other Factors Influencing the Euro?
Yes, several other factors are at play:
U.S. Customs Taxes on Reciprocity: Market observers are watching the potential imposition of new U.S. customs taxes on April 2nd. The Wall Street Journal also mentions that some sectors may be excluded from these surcharges.
Federal Reserve’s Position: The Federal Reserve (Fed) faces a complex situation, stuck between managing economic growth and addressing inflation. Thomas Giudici, head of bond management at AURIS GESTION, noted that the Fed is ”taken between two fires” and may be hesitant to overreact.
inflation Data and Customs Duties: Upcoming Personal Consumption Expenditures (PCE) inflation data plays a crucial role. César Perez Ruiz, head of investments and CIO at Pictet Wealth Management, highlighted that basic PCE inflation could lead to a delay in the disinflationary trend. Additionally, the European Union’s postponement of 50% customs duties on American whiskey until mid-april could offer room for negotiation.
IFO Index: The IFO index of the business climate in Germany, released at 86.7, indicates a shift from “crisis” to “recovery”
Consumer Confidence: Consumer confidence data from the U.S. is also being closely watched.
Key Data Points and Trading Levels
Here’s a summary of key data and trading levels as of March 26, 2025
| Parameter | value |
| —————— | ———– |
| Euro Trading Price | $1.0820 |
| Support Level | $1.0758 |
| Resistance Level | $1.1012 |
| IFO Index | 86.7 |
What Are the Technical Indicators for the Euro-Dollar Pair?
Volatility around $1.0608 has changed the currency pair’s configuration, validating support on a 50-day moving average. A rapid decline toward parity (€1 = $1) is now less plausible. Consolidation is occurring near the 20-day moving average amid tightening Bollinger bands.