Euro Rises Ahead Of German Debt Vote, Trump-Putin Talks

(RTTNews) - The euro strengthened against other major currencies in the European session on Tuesday, with an upcoming German vote on historic debt reforms and Ukraine peace talks in focus.

The German parliament vote seeks to exempt defense spending from debt limits and create a 500-billion-euro infrastructure plan fund.

The approval for the plan could boost the nation's economy and stimulate growth across Europe, despite the ongoing tensions with the U.S.

The conservatives and Social Democrats (SPD), who are looking to form a coalition after the recent general election, are aiming to create the huge fund to facilitate higher spending on security.

U.S. President Donald Trump will talk to his Russian counterpart Vladimir Putin later in the session and discuss ending the war in Ukraine.

Traders expect the European Central Bank (ECB), which has lowered interest rates six times since June 2024, may halt the monetary easing cycle have also been bolstered by strong confidence over the German debt agreement.

In economic news, the German ZEW Economic Sentiment Index exceeded expectations of 43.6 and rose sharply to 51.6 in March from 26.0 in February. Meanwhile, the Current Situation Index improved to -87.6 from -88.5 last month, although it fell short of forecasts of -80.5.

The Eurozone ZEW Economic Sentiment Index was significantly higher than 24.2 in February and somewhat higher than 39.6 in March. In the European trading today, the euro rose to more than a 5-month high of 1.0955 against the U.S. dollar, a 4-day high of 0.8429 against the pound and nearly a 2-month high of 164.19 against the yen, from early lows of 1.0904, 0.8406 and 162.99, respectively. If the euro extends its uptrend, it is likely to find resistance around 1.13 against the greenback, 0.85 against the pound and 166.00 against the yen.

Against the Swiss franc, the euro edged up to 0.9638 from an early low of 0.9611. The euro may test resistance near the 0.97 region.

Looking ahead, Canada CPI for February, U.S. building permits, housing starts, export and import price, industrial and manufacturing production indices, all for February and U.S. Redbook report are slated for release in the New York session.