Euro Falls As Eurozone Inflation Slows Slightly

(RTTNews) - The euro weakened against other major currencies in the European session on Tuesday, as the soft Eurozone inflation data in March contributed to the already high expectations for another interest rate decrease by the European Central Bank later in April.

Data from Eurostat showed that the Eurozone harmonized index of consumer prices rose 2.2 percent year-on-year in March, slightly slower than the 2.3 percent rise in February. The rate matched expectations.

Core inflation that excludes prices of food, alcohol and tobacco, slowed to 2.4 percent from 2.6 percent in the previous month. Inflation was expected to slow marginally to 2.5 percent.

Data showed that growth in food prices increased to 2.9 percent from 2.7 percent. Meanwhile, prices of energy fell 0.7 percent, reversing February's 0.2 percent gain.

Services costs rose at a slower pace of 3.4 percent after a 3.7 percent increase. At the same time, growth in non-energy industrial goods prices held steady at 0.6 percent.

On a monthly basis, the HICP logged an increase of 0.6 percent in March. Final data is due on April 16.

Regarding whether Trump's tariffs will cause a U.S. recession, market participants are divided.

Wednesday, it will be Liberation Day in America, as President Trump has so proudly dubbed it," White House press secretary Karoline Leavitt said.

"The President will be announcing a tariff plan that will roll back the unfair trade practices that have been ripping off our country for decades. He's doing this in the best interest of the American worker."

Closer home, European Commission President Ursula von der Leyen said in a speech today that the European Union is open to negotiations with the U.S. on tariffs but will take retaliatory measures, if necessary,

"We will approach these negotiations from a position of strength. Europe holds a lot of cards, from trade to technology to the size of our market. But this strength is also built on our readiness to take firm countermeasures if necessary. All instruments are on the table," she said.

In economic releases, the HCOB Eurozone Manufacturing PMI came in at 48.6 in March 2025, slightly below the preliminary estimate of 48.7 but up from February's final reading of 47.6.

In the European trading, the euro fell to 0.8356 against the pound and 0.9523 against the Swiss franc, from early highs of 0.8376 and 0.9564, respectively. If the euro extends its downtrend, it is likely to find support around 0.81 against the pound and 0.91 against the franc.

Against the U.S. dollar and the yen, the euro slipped to 1.0791 and 161.26 from early highs of 1.0831 and 162.30, respectively. The euro may test support near 1.03 against the greenback and 155.00 against the yen.

Looking ahead, U.S. and Canada S&P Global manufacturing PMI reports for March, U.S. construction spending for February, U.S. ISM manufacturing new orders for March and U.S. Dallas Fed services index for March are slated for release in the New York session.