The euro traded lower against the US dollar on Friday after the US Personal Consumption Expenditures (PCE) price index exceeded market expectations. Core PCE, the Federal Reserve's preferred inflation gauge, rose more than forecast for the reported month, prompting markets to reassess the timing of potential rate cuts and reprice futures. Analysts at Danske Bank said the data supports a higher-for-longer stance from the Federal Reserve, while the European Central Bank has been more open to rate adjustments amid softer eurozone economic momentum. That policy divergence, alongside resilient US growth and weaker eurozone prospects, could keep the EUR/USD pair under pressure if further US data also surprises to the upside. Traders are watching employment figures, consumer sentiment and central bank communications for clues about the Fed's next move. The exchange-rate shift has implications for exporters, importers, overseas assets, emerging-market currencies and global trade, while the inflation outlook remains uncertain and could sustain volatility.