The EUR/USD pair experienced a significant rally on Friday, surging 0.77% to approach the 1.0500 mark. This upward trend was largely driven by a positive market atmosphere and a weakening US Dollar. Contributing factors included the absence of new tariff talks on China by US President Trump, which further dampened the Dollar's strength. Meanwhile, the German government has revised its growth projection for 2025 down to 0.3%, a stark decrease from the previous estimate of 1.1%.
The recent upward movements in the EUR/USD pair were supported by positive Purchasing Managers' Index (PMI) data from Germany and the Eurozone, indicating expansion in private sector business activity in January. Moreover, President Trump's policies on low taxes and minimal regulation are anticipated to foster growth, adding to the optimistic outlook.
The foreign exchange market also witnessed continued momentum in the Dogelon Mars (ELON) price, which extended its rally after gaining more than 18% throughout the week. The GBP/USD pair maintained its rebound at approximately 1.2400 during the European session on Friday.
Looking ahead, investors have turned their attention to upcoming PMI data from the UK and US. These indicators are expected to provide further insights into economic conditions and potential impacts on currency movements. Meanwhile, the Federal Reserve has communicated that it requires tangible signs of economic weakness and lower inflation rates before considering additional policy easing, following a series of rate cuts totaling 100 basis points.
It is important to note that the perspectives shared in this article are those of the authors and do not necessarily represent the official stance of FXStreet. Neither the author nor FXStreet is registered as an investment advisor, and this article should not be interpreted as investment advice.