Foreign Exchange Market Update

April 30, 2025

United States (U.S.): GDP Unexpectedly Dips 0.3% In First Quarter; Consumer Prices Virtually Unchanged in March, In Line With Estimates; Crude Oil Inventories Fall Much More Than Expected

The Commerce Department released a report showing that the U.S. economy unexpectedly shrank in the first quarter of 2025. The report said real gross domestic product fell by 0.3% in the first quarter after surging by 2.4% in the fourth quarter of 2024. Economists expected GDP to rise by 0.4%. The unexpected dip in GDP primarily reflected an increase in imports, which is a subtraction in the calculation of GDP. A decrease in government spending also weighed on GDP, while increases in investment, consumer spending, and exports helped limit the downside. 04/30/2025 - 08:38:00 (RTTNews)

A closely watched report by the Commerce Department showed that U.S. consumer prices were virtually unchanged in March. The Commerce Department said its PCE edged down by less than a tenth of a percentage in March after rising by an upwardly revised 0.4% in February. Economists expected the PCE price index to come in unchanged compared to the 0.3% increase reported the previous month. The report showed a 0.5% decrease in prices for goods more than offset a 0.2% uptick in prices for services. The Commerce Department also said the annual rate of growth by the PCE price index decelerated to 2.3% in March from an upwardly revised 2.7% in February. Economists expected the annual rate of growth by the PCE price index to slow to 2.2% from the 2.5% reported for the previous month. 

Meanwhile, the Commerce Department said the core PCE, which excludes food and energy prices, crept up by less than a tenth of a percentage in March after climbing by an upwardly revised 0.5% in February. The core PCE price index was expected to come in unchanged compared to the 0.4% increase originally reported for the previous month. The report also said the annual growth rate by the core PCE price index slowed to 2.6% in March from an upwardly revised 3.0% in February. 04/30/2025 - 10:38:00 (RTTNews)

A report released by the Energy Information Administration showed crude oil inventories in the U.S. fell by much more than expected in the week ending on April 25. The EIA said crude oil inventories slid by 2.7 million barrels last week after inching up by 0.2 million barrels the previous week. Economists expected crude oil inventories to edge down by 0.6 million barrels. At 440.4 million barrels, U.S. crude oil inventories are about 6% below the five-year average for this time of year, the EIA said. Gasoline inventories slumped by 4.0 million barrels last week and are about 4% below the five-year average for this time of year. 

Meanwhile, distillate fuel inventories, which include heating oil and diesel, rose by 0.9 million barrels last week but remained about 13% below the five-year average for this time of year. 04/30/2025 - 10:36:00 (RTTNews)

European Union (E.U.): Eurozone GDP Growth Accelerates To 0.4%

Euro traded at 1.1367 against USD at 9:00 AM PST.

Euro area economic growth accelerated in the first quarter as exports may have benefited from higher demand from the U.S. ahead of the imposition of higher trade tariffs. The quarterly growth in gross domestic product doubled to 0.4% from 0.2% seen in the fourth quarter of 2024, preliminary flash estimates from Eurostat showed. Economists forecasted the single-currency economy to grow again by 0.2%. Yearly growth in the Eurozone was steady at 1.2% in the first quarter. This was also stronger than the forecast for 1.0% expansion. The next estimate for the first quarter is slated to be released on May 15. The details of GDP components for the first quarter will be available by July. The currency bloc started the year on a stronger footing than anticipated and activity surveys suggested, Franziska Palmas, from Capital Economics, said. 

Nevertheless, economists expect growth to slow sharply in the next six months as the U.S. tariffs introduced in April will hit activity and any boost from the German fiscal stimulus will mostly be felt next year. Among bigger economies of the currency bloc, Spain showed the fastest expansion at 0.6% in the first quarter. Italy's growth improved to 0.3% from 0.2%. The German economy grew 0.2%, but it offset the 0.2% contraction in the preceding quarter. Similarly, France's growth was subdued at 0.1% after a 0.1% fall a quarter ago. 

Meanwhile, economic growth in the E.U. softened to 0.3% on a quarterly basis from 0.4% in the prior quarter. On a yearly basis, growth remained unchanged at 1.4%. 5.1% from 3.5% a month ago. 04/29/2025 - 03:14:00 (RTTNews)