EUR/USD Steady, Trump Tariffs a New Weigh on the Dollar
The EUR/USD pair maintained a positive bias for the second consecutive day on Thursday, supported by a weakening US dollar amid growing market concerns about US trade policy. In the Asian session, EUR/USD moved in the range of 1.1815–1.1820, slightly up around 0.1%, although the pace of gains remained limited and did not show strong bullish momentum.
Pressure on the dollar emerged despite the Federal Reserve maintaining a relatively hawkish tone. Market participants assessed that uncertainty surrounding US President Donald Trump's tariffs was again a dominant factor, putting dollar buyers on the defensive. The US has implemented a 10% global tariff on non-exempt goods, following a Supreme Court ruling limiting the previous "reciprocal" tariff scheme.
Market concerns increased after Trump announced that his administration was seeking to increase the tariff rate to 15%. The prospect of a tariff increase is considered to trigger retaliatory action from trading partners and disrupt global supply chains, ultimately potentially suppressing growth and increasing volatility. This situation has caused the dollar to lose some of its appeal as a safe haven, allowing the euro to remain in positive territory.
From the European side, the euro has also received support from speculation that the European Central Bank (ECB) is nearing the end of its interest rate cutting cycle. ECB President Christine Lagarde assessed that interest rate policy is in a "good" position and indicated that no policy changes are imminent, strengthening the euro's position amidst a weakening dollar.
However, investors remain cautious about aggressively adding to long positions. The European Parliament postponed a vote on the EU-US trade deal, adding to uncertainty in transatlantic trade relations. The market now awaits further comments from Lagarde and the release of US data, such as jobless claims, as the next trigger that could determine whether EUR/USD can extend its gains or return to consolidation. (asd)
Source: Newsmaker.id
