Eur/Usd Strengthens As Investors Worry About Trump Tariffs
EUR/USD continued its upward trajectory and strengthened near a six-week high of 1.0520 during the North American session on Monday (1/27). The major currency pair strengthened as the US Dollar (USD) gave up its intraday gains inspired by concerns about US President Donald Trump’s tariffs on Colombia and turned negative. The US Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, turned negative and fell near 107.00.
Over the weekend, Trump proposed a 25% tariff on South American trading partner Colombia after the country refused to accept military flights carrying deportees from the US. However, the White House later reported that the Colombian government agreed to “Trump’s terms for accepting illegal immigrants,” and Trump’s proposed tariffs are “now on hold,” the Associated Press (AP) reported.
Meanwhile, market sentiment is likely to remain cautious, with investors awaiting interest rate decisions from the Federal Reserve (Fed) and the European Central Bank (ECB) on Wednesday and Thursday, respectively.
According to the CME FedWatch tool, the Fed is all but certain to keep interest rates unchanged in the range of 4.25%-4.50%. Investors will be watching Fed Chairman Jerome Powell’s press conference to determine whether policymakers are comfortable with Trump’s call for an immediate rate cut.
On the US economic front, investors will focus this week on the Durable Goods Orders and Personal Consumer Expenditure (PCE) Price Index data for December and the preliminary Q4 Gross Domestic Product (GDP) data.
Source: FXStreet
