Foreign Exchange Market Update

February 28, 2025

United States (U.S.): Consumer Price Inflation Data Matches Estimates in January

Closely watched readings on CPI increased in line with economist estimates in January, according to a report by the Commerce Department on Friday. The Commerce Department said its PCE rose by 0.3% in January, matching the increase seen in December and economist estimates. The annual growth rate by the PCE price index slowed to 2.5% in January from 2.6% in December, which also matched expectations. Excluding food and energy prices, the core PCE price still climbed by 0.3% in January after edging up by 0.2% in December. The increase in core prices was also in line with estimates. The annual rate of core PCE price growth slowed to 2.6% in January from 2.9% in December, which also matched expectations. The Federal Reserve's preferred readings on consumer price inflation were included in the Commerce Department's report on personal income and spending. The report said personal income grew by 0.9% in January after rising by 0.4% in December, while personal spending dipped by 0.2% in January after climbing by 0.8% in December. 02/28/2025 - 08:42:00 (RTTNews)

European Union (E.U.): Eurozone Inflation Expectations Soften in January

Euro traded at 1.0405 against USD at 9:00 AM PST.

Corrects headline, first and second paragraphs Inflation expectations among euro area consumers eased in January, the Consumer Expectations Survey from the European Central Bank showed. Inflation expectations for the coming year softened to 2.6% in January from 2.8% in December. Meanwhile, expectations for three years ahead remained unchanged at 2.4%. The survey revealed that uncertainty about inflation expectations over the next twelve months remained unchanged, for the sixth consecutive time, at its lowest level since February 2022. 

Consumers' nominal income growth expectations over the coming twelve months decreased to 0.9% in January from 1.1% in December, the survey showed. Economic growth expectations for the next twelve months were less negative as they improved to -1.1% from -1.3%. Further, consumers continued to expect the future unemployment rate to be only slightly higher than the perceived current unemployment rate. The rate is seen at 9.9%, indicating a broadly stable labor market. Consumers expected the price of their home to increase by 3.0% over the next twelve months, which was slightly above the 2.9% estimated in December. 02/28/2025 - 08:43:00 (RTTNews)

Germany: Unemployment Rises Less Than Expected

German unemployment increased only moderately in February but the economic weakness remained visible on the labor market, the Federal Employment Agency. The number of people out of work rose 5,000 in February, while economists had forecast a sharp increase of 14,000. Unemployment had increased by 11,000 in January. The unemployment rate remained unchanged at 6.2%, in line with expectations. According to the labor force survey, the unemployment rate held steady at an adjusted 3.5% in January. The number of unemployed increased by 9,000 from December. On an unadjusted basis, the jobless rate rose to 3.7% in January from 3.2% in the same period last year, Destatis reported today. The largest euro area economy had contracted</a> 0.2% in the fourth quarter of 2024, reversing a 0.1% sequential growth in the third quarter. The sharp decline in German exports offset the improvement in consumption. For the whole year of 2024, the economic contraction was 0.2%. The International Monetary Fund forecast the German economy to grow 0.3% this year. 02/28/2025 - 07:57:00 (RTTNews)