The euro experienced a decline following a contentious meeting between Ukrainian President Volodymyr Zelenskiy and U.S. President Donald Trump. The meeting, which aimed to dissuade the U.S. from aligning with Russian President Vladimir Putin, ended without a peace agreement or a joint development deal on natural resources. Jack Mcintyre of Brandywine Global noted, "A big driving force of markets now is uncertainty on a lot of different levels, and this is just another part of that."
Post-meeting, the euro fell by 0.29% to $1.0367, reaching its lowest point since February 12. The currency had shown signs of stabilization, partially due to peace deal anticipations. Conversely, the U.S. dollar initially dipped after inflation data met expectations, while consumer spending unexpectedly decreased by 0.2% in January. Thierry Wizman from Macquarie commented on the spending decline, suspecting it to be idiosyncratic, but warned of potential weakness in the following months.
The dollar index, which compares the greenback to a basket of currencies, increased by 0.23% to 107.61. Market expectations for a Federal Reserve rate cut in June rose slightly, with a 79.1% probability of a 25 basis point reduction. The dollar had previously declined due to concerns over U.S. economic growth and inflation.
In related currency movements, the Canadian dollar weakened to C$1.45, and the Mexican peso fell to 20.557 against the dollar. The Canadian economy grew by 2.6% in the fourth quarter, driven by consumer spending and exports. The dollar also strengthened against the Japanese yen by 0.53% to 150.59, while sterling weakened to $1.2568.
Source: Reuters