The euro is facing pressure as trade tensions escalate due to new US tariffs and uncertainty surrounding the EU-US trade deal. The currency hovers below the $1.18 level, with investors closely monitoring upcoming inflation data from major European economies and awaiting comments from Federal Reserve officials for further direction.
- US President Trump’s new 10% global tariff took effect, adding to trade tensions.
- White House officials are reportedly drafting an order that could raise the tariff rate to 15%.
- The European Parliament paused progress on a trade deal with Washington until greater policy clarity emerges from the US.
- Investors are awaiting inflation readings from Germany, France, and Spain.
- EUR/USD remains trapped in a tight range below 1.1800.
- The US Dollar is experiencing modest strength and improvement in risk sentiment.
- The European Parliament postponed a vote on the EU-US trade deal.
- Federal Reserve officials’ comments on the tariff uncertainty could impact the dollar’s strength.
- Markets virtually see no chance of a Fed rate cut in March.
The currency’s performance is being influenced by both transatlantic trade developments and monetary policy considerations. Escalating tariffs and uncertain trade relations with the US are creating headwinds, while investors are carefully watching European inflation data and the potential response from the European Central Bank. The direction of US monetary policy, as signaled by Federal Reserve officials, is also playing a crucial role, potentially influencing the dollar’s strength and, consequently, the euro’s trajectory.