The euro experienced a dip to $1.04, briefly touching its lowest mark since February 12th, as investors carefully analyzed recent economic data. This movement occurred ahead of a highly anticipated European Central Bank (ECB) policy meeting next week. Market reactions were further amplified by US President Donald Trump’s announcement of a 25% tariff on goods from Mexico and Canada, set to take effect on Tuesday, alongside additional 10% duties on Chinese imports. Furthermore, the looming threat of a 25% tariff on EU imports, including cars, added to the market uncertainty.
From an economic perspective, Germany’s inflation rate remained steady at 2.3% in February. However, the core inflation rate in Germany saw a decrease, reaching a three-year low of 2.6%. In France, inflation figures were more pronounced, dropping unexpectedly to a four-year low of 0.8%. Conversely, Italy and Spain both reported an acceleration in inflation to 1.7% and 3% respectively, aligning with market expectations.
The European Central Bank is widely expected to implement a fifth consecutive interest rate cut on Thursday, signaling potential further reductions in response to persistent slowing inflation and sluggish economic growth within the Eurozone.
EUR/USD Performance and Predictions
On Friday, February 28th, the EURUSD pair decreased by 0.0021 or 0.20%, settling at 1.0378, down from 1.0398 in the previous trading session. Historically, the Euro US Dollar exchange rate reached its peak at 1.87 in July 1973. It’s important to note that the euro as a currency was officially introduced on January 1, 1999. However, by using weighted averages of previous currencies, synthetic historical price data can be modeled to extend further back in time. The latest data for the Euro US Dollar Exchange Rate was updated on March 1, 2025.
Short-Term and Long-Term EUR/USD Forecast
Current models and analyst expectations from Trading Economics suggest that the EUR/USD exchange rate is anticipated to trade around 1.03 by the end of the current quarter. Looking ahead, forecasts indicate a further potential decrease to 1.01 within the next 12 months. These predictions reflect ongoing economic pressures and anticipated central bank actions influencing the euro’s value against the US dollar.
