The Eurozone's investor sentiment showed substantial improvement in March, as indicated by the Sentix Investor Confidence Index, which surged to -2.9 from February's -12.7. Released on Monday, the data reflected renewed optimism among investors, particularly in Germany, where sentiment was described as "downright euphoric" by Sentix. This upbeat sentiment has provided significant support to the EUR/USD, which picked up fresh bids and rose to near 1.0850 during the European session.
The moderation in the core index suggests a potential giveback in some categories that experienced significant gains in January. Nevertheless, the overall sentiment in the Eurozone has been buoyant, with the Current Situation gauge for the bloc rising to -21.8 in March from -25.5 in February. These developments have been instrumental in lifting the sentiment around the Euro, as reflected in its performance against the US Dollar.
In currency markets, the EUR/USD is trading 0.11% higher on the day at around 1.0845, maintaining its renewed upside momentum. The pair has benefited from the positive Sentix Investor Confidence data and is holding steady near 1.0850 after the release of this encouraging Eurozone data. However, US tariff uncertainty and a pause in the US Dollar downtrend continue to pose risks for traders.
Meanwhile, consumer price inflation in the Eurozone emerged strong in 2025, although February saw a cooling in price growth. This moderation could have implications for future monetary policy decisions by the European Central Bank (ECB). Market participants are closely monitoring these inflation trends alongside other economic indicators.
Adding to the market sentiment, traders are evaluating comments made by United States President Donald Trump during a Fox News interview over the weekend. President Trump characterized the economy as being in a "transition" phase, which has introduced additional uncertainty into global markets. This uncertainty has contributed to a degree of risk aversion, impacting currency pairs like the EUR/USD.
In other markets, gold prices have stabilized and are consolidating within a tight range near the $2,900 level at the start of the week. This consolidation reflects broader market conditions as investors weigh various economic factors and geopolitical developments.