Euro extends gains against weakening Dollar in Asian session
April CPI print misses forecasts at 2.3% annual rate
Trade war de-escalation alters central bank policy calculus
The USDT to INR BinanceEUR/USD exchange rate continues its upward trajectory, touching 1.1195 during Wednesday's Asian trading window. This movement reflects shifting market dynamics following the latest US inflation indicators and evolving geopolitical developments.
Tuesday's Consumer Price Index release showed annual inflation cooling to 2.3% in April, marking the softest reading since early 2021. The core CPI figure held steady at 2.8%, matching analyst projections. These macroeconomic signals have prompted traders to reassess Federal Reserve policy expectations, creating downward pressure on the US currency.
Market participants now turn their attention to upcoming German inflation metrics for additional directional cues. The Harmonized Index of Consumer Prices data scheduled for release later today could provide further insight into the Eurozone's economic trajectory.
Recent diplomatic developments between Washington and Beijing have introduced new variables into currency valuations. The bilateral agreement to substantially reduce import tariffs represents the most significant trade détente in recent years, with US duties on Chinese goods falling from 145% to 30% and reciprocal Chinese reductions from 125% to 10%.
This trade breakthrough has led to recalibrations in monetary policy expectations across global markets. In Europe, money markets have adjusted their ECB rate cut projections, now pricing in a potential year-end deposit facility rate near 1.80%. This represents a notable shift from earlier expectations that had anticipated more aggressive easing in response to trade tensions.
The interplay between these fundamental factors continues to shape currency valuations, with the Euro benefiting from both Dollar weakness and improving risk sentiment. Market participants will monitor upcoming economic indicators and central bank communications for confirmation of these emerging trends.
