EUR/USD nudges up amid US tariffs ¡uncertainty and a hawkish ECB's Lagarde
The EUR/USD pair is trimming some losses on Friday, and is trading at the upper range of the 1.1700s as the Dollar gives away post-NFP gains amid growing concerns about tariffs and following hawkish remarks from the European Central Bank (ECB) President, Christine Lagarde.
In light of the scarce progress on trade deals, Trump affirmed that he will start sending letters to trading partners on Friday, informing them about the levies that will be applied to their products. Market concerns that high tariffs might boost inflation and lower economic growth have been a major weight for the US Dollar since April's "Liberation Day".
Beyond that, Trump's "big, beautiful tax bill" passed the scrutiny of the House of Representatives on Thursday and is likely to become law in the coming days. The Congressional Budget Office estimated that the bill will boost the current fiscal deficit of $39.2 trillion by $3.3 trillion over the next 10 years, which raised fears of a debt crisis in the world's major economy and has been another source of negative pressure for the US Dollar.
On Friday, ECB's Lagarde affirmed in an interview that the bank is in "a good position now", fully committed to keeping price inflation at the 2% target, which practically discards another rate cut at their next meeting in late July.
The US Dollar jumped on Thursday as the Nonfarm Payrolls report showed that the US economy created way more employment than expected in June, highlighting the resilience of the labour market and dampening hopes of imminent rate cuts by the Federal Reserve (Fed). Chances of a Fed cut in July have dropped to 5%, from around 20% before the data release, according to the CME Group's Fed Watch Tool.
Source: Fxstreet
