The euro (EUR) held steady against the US dollar (USD) on Friday (5/30) after a weaker-than-expected US Personal Consumption Expenditures (PCE) Price Index, which is close to the Federal Reserve's (Fed) 2% target, lifted the pair from an intraday low of 1.1312. EUR/USD was trading at 1.1361, barely changed on the day.

The market mood remains fragile, shifting between optimism and pessimism, with US equities weighed on tariffs and trade news. The US Court of International Trade ruled that the tariffs were illegal and ordered Washington to lift them within ten days. However, the Trump administration appealed the ruling in Federal Court, which reimposed most of the duties imposed on April 2 "Liberation Day."

President Donald Trump sparked a shift in sentiment after he said that China was not committed to meeting the terms of the Swiss trade deal. However, he said he would speak with Chinese President Xi Jinping to speed up negotiations between Washington and Beijing.

In addition to trade policy, the passage of Trump's "Big Beautiful Bill," which is expected to add trillions of dollars to the already high fiscal deficit, has traders leaning on assets outside the US in the so-called "Sell America" trade.

Data wise, the US docket revealed that PCE figures were moving in the right direction, but not so with core PCE inflation, which remained stuck in the midpoint between the 2% and 3% range. Meanwhile, an improvement in Consumer Sentiment, as revealed by the University of Michigan (UoM), showed that American households were slightly more optimistic about the economy despite expecting a spike in inflation.

Across the pond, German Retail Sales plunged on a monthly basis. Inflation in Germany and Spain remained within the European Central Bank's (ECB) 2% target range, which could increase the chances of an ECB rate cut at its June 5 meeting. (alg)

Source: FXstreet