Eur/Usd Weakens Below 1.1400 Amid Trade Uncertainty
The EUR/USD pair weakened near 1.1380 during the early Asian session on Friday (4/25). However, the downside for the major currency pair may be limited as investors remain concerned about the US-China trade tensions. On Friday, the final reading of Michigan Consumer Sentiment will be released.
US President Donald Trump said late Thursday that his administration is talking to China about trade. Meanwhile, China said that there are no negotiations taking place on the economy and trade, and urged the US to withdraw all unilateral tariff measures if it really wants to resolve the issue. Persistent concerns over Trump’s potential tariff threats and persistent trade tensions are likely to weigh on the greenback and act as a tailwind for EUR/USD in the near term.
“There seems to be a gulf the width of the Pacific Ocean between the way the US and China view trade,” said Matt Weller, head of market research at StoneX. “And I think as long as that gulf remains, the dollar rally is probably not going to last.”
Across the pond, traders raised their bets that the European Central Bank (ECB) will cut interest rates at its June policy meeting due to dovish remarks from ECB policymakers. This, in turn, weakened the common currency against the USD.
ECB policymaker and Finnish central bank governor Olli Rehn said on Thursday that the central bank should not rule out “a larger rate cut”. Meanwhile, ECB Governing Council member Madis Muller said on Wednesday that the central bank may have to cut interest rates to levels that stimulate the economy if trade uncertainty proves more damaging to growth.
Source: FXStreet
