EUR/USD Falls Below 1.1250 as US Dollar Strengthens Ahead of GDP Data

EUR/USD Falls Below 1.1250 as US Dollar Gains Ahead of Key Economic Data

May 29, 2025 – The EUR/USD currency pair continued its downward trend on Thursday, slipping below the 1.1250 level during Asian trading hours. The move comes as the US Dollar strengthens in response to a federal court ruling and anticipation surrounding upcoming US economic data releases.

On Wednesday, a federal court in Manhattan blocked former President Donald Trump’s proposed “Liberation Day” tariffs, stating that the initiative was unconstitutional and exceeded presidential authority. The three-judge panel at the Court of International Trade ruled that Trump lacked the legal authority to impose such measures, providing a boost to market sentiment toward the US Dollar.

In addition to legal developments, attention is now focused on key US economic data scheduled for release later today, including the Q1 Gross Domestic Product (GDP) Annualized, Personal Consumption Expenditures (PCE) Prices QoQ, and Initial Jobless Claims. Markets expect a 0.3% contraction in the GDP figure, which could influence the Fed's future policy stance.

On the European side, European Central Bank (ECB) Governing Council member Klaas Knot expressed concern over inflation trends in the Eurozone, suggesting the ECB may need to consider stronger policy action if the current trajectory persists. His comments add to investor uncertainty surrounding the euro.

Meanwhile, the Federal Open Market Committee (FOMC) released the minutes from its latest policy meeting, revealing that most Fed officials support keeping interest rates steady due to persistent economic uncertainty. Policymakers noted that recent developments justify a cautious approach moving forward.

Market Reaction

As of the time of writing, EUR/USD is trading around 1.1240, marking its third consecutive day of losses. The pair’s downward momentum is being driven by US Dollar strength and investor caution ahead of the economic data dump.

Traders are now closely watching the upcoming US data for clearer direction, especially as it may signal future moves by the Federal Reserve or influence broader market sentiment.