The euro showed a relatively stable performance against the US dollar, with the Greenback gaining strength amid a cautious market sentiment driven by mixed macroeconomic data releases from the US. In the early session, EUR/USD experienced gains due to a better-than-expected GfK print. However, it was unable to sustain these early gains and ultimately closed the day with minimal changes.
The GfK Consumer Climate Indicator revealed a slight improvement in German consumer morale for March compared to the 11-month low in February. Despite this, the headline index remained below its long-term average for the 28th consecutive time, marking the longest pessimistic streak. Income expectations reached their highest level since February 2022, while the propensity to buy and economic prospects remained relatively stable. Concurrently, the propensity to save reached its highest point since June 2008. This trend was mirrored across the Eurozone, where data indicated a notable slowdown in bank lending growth to nearly a 9-year low. This highlighted the significant deceleration in the bloc's economy due to the European Central Bank's unprecedented tightening measures implemented in recent months. Overall private sector credit growth, encompassing both households and non-financial corporations, remained at 0.4%, unchanged from the previous month.
EUR/HUF saw an increase of over 0.6%, reaching a 5-month high, as the National Bank of Hungary (NBH) executed an anticipated 100 basis points cut to its base rate, bringing it down to 9%. This move accelerated the rate-cutting pace following weaker-than-expected growth and benign inflation data since the January meeting. The euro maintained stability across most G10 pairs, with slight appreciation observed only against the Canadian dollar and the Swedish Krona. Looking ahead, investors will closely monitor today's Eurozone sentiment data for additional signs of a potential recovery in the Eurozone.
