EUR/USD Weakens Below 1.0450 On Trump’s Tariff Threats
The EUR/USD pair weakened near 1.0425 during the American trading session on Wednesday (20/2). Tariff concerns from US President Donald Trump and geopolitical tensions provided some support to the US Dollar (USD). Investors await the US weekly Initial Jobless Claims report, the CB Leading Economic Index, and the Philly Fed Manufacturing Index, due on Thursday.
The FOMC meeting minutes released on Wednesday stated that it was appropriate to keep the target interest rate unchanged at the January meeting, adding that the Fed believed it was well-positioned to take time to assess the outlook for economic activity, the labor market, and inflation. Fed policymakers agreed that inflation would have to show clear signs of slowing before further rate cuts could be made.
The Federal Reserve’s (Fed) Austan Goolsbee, Michael Barr, and Alberto Musalem are due to speak on Thursday. Their remarks could provide some clues on the future direction of US interest rates. Aggressive comments from Fed policymakers could boost the greenback in the near term.
The latest round of tariff threats lifted the greenback and created a drag on EUR/USD. Trump has criticized the EU’s auto tariffs and threatened reciprocal tariffs on a range of sectors. Late on Tuesday, Trump said he intended to impose auto tariffs of “around 25%” and similar duties on semiconductor and pharmaceutical imports.
Source: FXStreet
