EUR/USD rises towards 1.1400 on Trump’s Tariff Threats
EUR/USD retraced its latest losses recorded in the previous session, trading around 1.1370 during Asian hours on Monday (02/06). The pair strengthened as the US Dollar (USD) weakened as the US Court of Appeals, on Thursday, ruled to allow US President Donald Trump’s tariffs to take effect.
On Wednesday, a three-judge panel at the Court of International Trade in Manhattan said that Trump exceeded his authority in imposing broad import tariffs and declared the executive order issued on April 2 unlawful.
On Friday, President Trump told a rally in Pennsylvania that he planned to double tariffs on steel and aluminum imports to build pressure on global steel producers and intensify the trade war. “We’re going to be putting tariffs on 25%. We’re going to go from 25% to 50% – tariffs on steel into the United States, which will further secure the steel industry in the United States,” he said, according to Reuters.
On Saturday, the European Commission (EC) warned that Europe is ready to retaliate against President Trump’s plan to double tariffs on steel and aluminum imports, escalating the trade dispute between the world’s two largest economies.
Previously, President Trump postponed the deadline for tariffs on EU imports from June 1 to July 9. Meanwhile, Brussels also agreed to accelerate trade talks with the United States to avoid a transatlantic trade war.
Last week, European Central Bank (ECB) Governing Council member Klaas Knot said that the current outlook for European inflation is unclear, challenging the central bank to take direct action. ECB policymaker François Villeroy de Galhau noted that “policy normalization in the euro area may not be complete.”
Source: FXStreet
