The Euro hovered near its strongest level since early October 2024, trading around $1.10, as the dollar faced downward pressure amidst escalating global trade tensions. Investors are closely monitoring the situation, with expectations of potential monetary easing by the European Central Bank (ECB) increasing.
- The Euro is near its strongest level since early October 2024, around $1.10.
- The dollar is under pressure.
- Trade war tensions are escalating.
- China plans to impose 34% tariffs on all U.S. goods starting April 10.
- President Trump implemented a 10% tariff on all imports.
- The EU faces a 20% levy on its goods.
- China faces an additional 34% duty on its goods.
- French President Macron called for a suspension of U.S. investments by companies.
- The European Commission is preparing retaliatory measures.
- Markets expect further monetary easing by the ECB.
- Investors are pricing in a 90% probability of a 25-basis-point rate cut in April.
- The ECB’s deposit rate is expected to decline to 1.65% by December from the current 2.5%.
The asset appears to be benefiting from the weakness of the dollar and expectations of ECB easing in the face of global trade war uncertainties. The planned tariffs and potential retaliatory measures could have significant economic implications for Europe, which might pressure the ECB to take action. The expected rate cut could further devalue the asset, but the fact that it is maintaining strength while this is anticipated suggests the market may have already priced it in or considers it a necessary measure to safeguard the Eurozone economy.