- Euro/US dollar is up to approximately 1,0800, as it corrects the US dollar, although US President Trump threatens to impose a widespread tariff on the euro and Canada region.
- Trump imposed a 25 % tax on imports of all cars and car components.
- Investors are waiting for inflation data in the United States of America, which will be issued on Friday.
Euro/US dollar jumps to approximately 1,0800 in trading hours in North America on Thursday. The main currency pair is gained after a six -day loss, despite deepening fears of a possible trade war between the United States (the United States) and the eurozone. Fears of a trade war escalated with the European Union’s readiness (EU) to announce the US reprisal tariff against the US tariff by the 25 % imposed by President Donald Trump on Wednesday, which will enter into force on April 2.
A spokesman for the European Union Committee said: “I cannot tell you accurate time when our potential response will come to these procedures that have not been implemented, but I can assure you that it will be in time, and it will be strong, and it will be careing well and that it will achieve the intended impact.”
The German economy will be one of the main victims of Trump’s definitions of cars, sending 13 % of total car exports to the United States. Such a scenario will inhibit the euro look (Euro).
Earlier in the day, President Donald Trump also threatened large -scale customs duties on Canada and the euro area to take plans to harm the American economy. “If the European Union (the European Union) is working with Canada to cause economic harm in the United States of America, the customs tariff will be widely placed, much larger than the planned currently, to protect the best friend of all of these two countries at all,” Trump said in a position on the social truth.
After Trump’s threats on a large scale, the European policy maker told the Central Bank (ECB) and the ruler of the Belgian Central Bank, Pierre Wench in his interview in CNBC that the customs tariff will be bad for economic growth and enhance inflationary pressures. “The risk of inflation may be in the upward direction,” Wenche said, but he excluded the possibility of the interest rate this year. “It should be a temporary suspension in April on the table,” Wunsch added. On the contrary, traders are increasingly confident that the European Central Bank can reduce interest rates again at the April meeting amid the in -depth economic risks of the Trump -led tariff war.
Digest Market Mark: Euro/US dollar rebounds amid a correction in US dollar
- The recovery in the EUR/USD pair is also driven by a decent correction in the US dollar. The US dollar index (DXY) decreases from its highest level in three weeks at 104.65. Greenback refuses where investors expect that the effect of the Trump tariff agenda will be unfavorable for the local economy in the short term. The effect of expensive products that enter the United States will be affected by importers who will have no other option but to transfer to consumers. Such a scenario will be an inflationary of the economy, which would inhibit the purchasing power of families.
- Trump’s tariff policies complicated Federal Reserve (Fed). The Federal Reserve will be in a budget law, because the possibility of high inflation can force the central bank to maintain a restricted monetary policy position, and fears of slower economic growth lead to a need for an expansion policy. On Wednesday, Nile Kashkari, head of the Minynabolis Bank at the Bank of Minnabolis, said at the Detroit Lakes room on Wednesday that these forces are “a kind of washing.” He led that the Federal Reserve must “Just sitting where we are for a long period of time until we bear clarity.”
- According to the CME Fedwatch tool, the Federal Reserve Certainly maintains interest rates in the current range of 4.25 % -4.50 % at the May Policy meeting, but see a 65.5 % opportunity to reduce in June.
- On the economic data front, the first unemployment claims for the week ended March 21 at 224 km, close to the previous estimates and reading of 225K. The final estimate of GDP (GDP) shows that the economy expanded at a fastest 2.4 % rate compared to the 2.3 % revised estimate.
- To move forward, the main operator of the US dollar will be the data of the PC PC Prices Index (PCE) for February, which will be released on Friday. Economists expect the primary inflation in the United States, the preferred scale of the Federal Reserve Bank, has grown at a faster 2.7 % on an annual basis, compared to the 2.6 % increase seen in January.
Technical Analysis: EUR/USD bounces from the lowest level in three weeks near 1.0730
EUR/USD attracts offers after publishing a new three -week low level near 1.0730, which coincided with the 20 -day SIA moving average (EMA) earlier in the day.
The relative strength index cools for 14 days (RSI) to below 60.00, indicating that the upscale momentum has ended, but the bullish bias remains intact.
Looking down, the highest level on December 6 of 1.0630 will serve as the main support area of the husband. On the contrary, the psychological level of 1.1000 will be the main barrier of euro bulls.
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