EUR/USD nudges higher as the US Dollar pulls back with risk aversion easing
The EUR/USD pair is trading higher for the third consecutive day on Friday and has returned above the 1.1500 level, trading at 1.1520 at the moment of writing. US President Donald Trump's comments saying that he needs two weeks to decide on entering the Middle East conflict have eased investors' fears of an imminent attack and provided some support to the Euro.
The pair, however, remains on track to a moderate weekly loss, as investors' concerns that the war between Iran and Israel might turn into a wider regional conflict have kept risk appetite subdued, boosting demand for the US Dollar and other traditional safe havens.
Beyond that, the sharp increase in Oil prices poses another challenge for a soft Eurozone Economy while the trade relationship with the US remains highly uncertain. The negotiations between the US and European authorities remain stalled just two weeks before Trump's July 9 deadline to cut a deal or face high tariffs.
Earlier this week, the Federal Reserve (Fed) left interest rates unchanged and maintained its projection of two cuts in 2025, but Chairman Jerome Powell struck a hawkish note, downplaying the dot plot and warning about higher inflationary pressures stemming from Trump's tariffs. Powell's press release turned the decision into a "hawkish hold," which gave additional support to the US Dollar.
Source : Fxstreet
