EUR/USD Remains Resilient Amid US Economic Risks, Eyes On US CPI
EUR/USD is trading firmly around a five-month high of 1.0920 during European trading hours on Wednesday (3/12). The major currency pair remains strong as the US Dollar (USD) is broadly weaker amid growing concerns over the US economic outlook under President Donald Trump.
The US Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, is up slightly after measuring temporary support near a more than four-month low of 103.35.
The US dollar is underperforming as US President Trump’s tariff agenda has raised the risk of an economic recession in the near future. Market participants expect Trump’s “America First” policies to increase inflationary pressures, ultimately reducing the purchasing power of households already struggling with high inflation.
Meanwhile, fears of a US recession have increased after comments from US Commerce Secretary Howard Lutnick in a CBS interview on Tuesday suggested that the President’s policies are beneficial despite raising fears of a recession. Lutnick said, “These policies are the most important thing America has ever had, and they are worth it” when asked if Trump’s policies were worth pursuing despite causing a recession.
On the domestic front, investors await the US Consumer Price Index (CPI) data for February, due out at 12:30 GMT. Investors will be watching the US inflation data as it will influence market speculation over the Federal Reserve’s (Fed) monetary policy outlook. The headline inflation data is expected to have slowed to 2.9% year-on-year from a 3% increase seen in January. In the same period, the core CPI – which excludes volatile food and energy prices – is expected to have risen by 3.2% compared to the previous release of 3.3%.
Source: FXStreet
