Euro rose in European trade on Friday against a basket of major rivals, holding above one-week lows against the dollar and heading for the first profit in four days, as investors await European inflation data for February. 

The data will provide fresh pricing for the future of ECB interest rate cuts, which could start in May. 

EUR/USD

EUR/USD rose 0.2% to 1.0822, with a session-low at 1.0722, after losing 0.3% on Thursday, the third loss in a row, plumbing a week low at 1.0796 following German consumer prices data, which missed estimates. 

 Euro fell 0.15% in February, the second monthly loss in a row as the odds of early US rate cuts faded.

European Rates 

Also the odds of an early 0.25% ECB interest rate cut in April faded following bullish remarks by European Central Bank officials. 

The markets are now betting on the first European rate cut occurring in May or June.

According to the ECB’s last meeting minutes, policymakers believe it’s still too early to talk about rate cuts despite signs of slower inflation in the eurozone. 

ECB President Christine Lagarde said this week that wages growth remains strong, which will continue to prop up prices. 

Inflation Data

Now investors await consumer prices data for the whole eurozone in February to gauge the likely path ahead for ECB interest rates. 

Eurozone’s consumer prices are expected up 2.5% in February, decelerating from 2.8% in January.  

Dollar rose against most major rivals on Thursday following US inflation data, which could have an impact on Fed monetary policies. 

The data released earlier today showed US personal spending rose 0.3% in January m/m, and 2.4% y/y, slowing down slightly from December.

Core spending rose 0.4% m/m in January, and 2.8% y/y, also slowing from December. 

Such data showed that inflation is ever so slightly losing steam in accordance with Fed’s plans. 

On the other hand, US labor data showed unemployment claims rose 13 thousand to 215 thousand in the week ending February 24. 

Following the collective data, US two-year treasury yields fell by 3 basis points to 4.619%, while 10-year yields fell by 4 basis points to 4.232%. 

The dollar index rose 0.1% as of 21:28 GMT to 104.1, with a session-high at 104.2, and a low at 103.6. 

Loonie 

The Canadian dollar stabilized at 0.7364 as of 21:43 GMT.

Earlier government data showed Canada’s GDPgrowth  flat in December, while analysts expected a 0.2% growth rate. 

Aussie

The Australian dollar stabilized at 0.6499 against its US counterpart as of 21:43 GMT. 

Most US stock indices rose on Thursday following US data that showed inflation has slowed down. 

The data released earlier today showed US personal spending rose 0.3% in January m/m, and 2.4% y/y, slowing down slightly from December.

Core spending rose 0.4% m/m in January, and 2.8% y/y, also slowing from December. 

Such data showed that inflation is ever so slightly losing steam in accordance with Fed’s plans. 

On the other hand, US labor data showed unemployment claims rose 13 thousand to 215 thousand in the week ending February 24. 

Following the collective data, US two-year treasury yields fell by 3 basis points to 4.619%, while 10-year yields fell by 4 basis points to 4.232%. 

Dow Jones fell 0.2%, or 78 points as of 17:39 GMT to 38,871, while S&P 500 rose 0.1%, or 5 points to 5,075, as NASDAQ added 0.3%, or 44 points to 15,993. 

Global oil prices rose in European trade on Thursday, with US crude resuming gains after a hiatus, while Brent gained ground for the first time in three days amid continued pressure on prices

Traders are concerned about US oversupply after commercial crude stocks rose for the fifth straight week, while US production remains at record high. 

Now traders await important US personal spending data later today, which will provide important clues on the future of US rates. 

Global Prices 

US crude rose 0.65% to $78.66 a barrel, while Brent added 0.45% to $82.18 a barrel.

US crude lost 0.3% on Wednesday, the first loss in three days on profit-taking away from three-month highs at $79.58, while Brent slipped 0.6%. 

US Stocks 

The Energy Information Administration reported a buildup of 4.2 million barrels in US crude stocks last week to 447.2 million barrels, while analysts expected a buildup of 3.1 million barrels.

Gasoline stocks fell 2.8 million barrels to 244.2 million barrels, while distillate stocks fell 0.5 million barrels to 121.1 million barrels. 

US Production 

The EIA reported no change in US crude stocks at 13.3 million barrels for the third straight week, already a record high.

The EIA doesn’t expect US production to surpass that upper ceiling until February 2025. 

US Personal Spending Data

Now investors await important US personal spending data, the Fed’s favorite measure of inflation to gauge the likely path ahead for policies.

Investors already cut their forecasts for early US interest rate cuts this year following a spate of strong consumer and producer prices data. 

It’s now expected the Fed will start cutting interest rates in June, instead of March as expected before.