Euro/US dollar decreases with the strengthening of the US dollar after the real Trump tariff threats
- EUR/USD faces an intense sale of US President Donald Trump that he will impose definitions on the European Union.
- The US dollar is strengthened, as investors rush to the fleet of safe deception amid a global trade war.
- Investors are waiting for American NFP data for January.
EUR/USD NoseDEVes is more than 1 % to approximately 1.0240 at the beginning of the week. The main currency pair as President of the United States Donald Trump is back away from threats to impose a tariff on the European Union (European Union). During the weekend, Donald Trump slapped a 25 % tariff on Canada, Mexico and 10 % on China. Trump also warned that he would raise the fees on the commercial block, but he did not provide much information.
“This will definitely happen with the European Union,” Trump said. “I can tell you that they have really benefited from us,” Trump said. He also accused the old continent of not buying enough American cars and agricultural products. Trump added that the European Union takes “almost nothing and we take everything from them.”
The imposition of customs duties on the euro area will speed up its problems. The joint currency block is already facing the risk of slowdown. The GDP data in the eurozone (GDP) for the fourth quarter of 2024 showed that the economy was flat after expanding 0.4 % in the third quarter. The shrinking German economy is the weak link to the growth of the flat gross domestic product in the euro area. Flash German GDP data showed that the economy was contracting 0.2 % year on an annual basis in the last quarter of 2024.
The signs of weakness in the Euro Central Bank of the European Bank (ECB) can force reducing interest rates. The European Central Bank reduced the rate of 25 basis deposit facilities (BPS) to 2.75 % on Thursday and led the path of monetary policy clear, which is an expansionist. Traders have fully priced it in three interest rates and their vision is coming by summer because European Central Bank officials are confident that inflation will return sustainable to the required rate of 2 % this year.
On Monday, the HICP Flash report showed for the month of January that price pressures were overturned on a monthly basis. Basic HICP deviation – which excludes food and volatile energy – 1 % after an increase of 0.5 % in December. In the same period, the HICP deviation is also 0.4 %. In the year, HICP rose steadily by 2.7 %, faster than 2.6 % estimates. The basic HICP increased by 2.5 %, faster than expectations by 2.4 %.
The price of the euro today
The table below shows the percentage of euro change (EUR) against the main currencies listed today. Euro was the strongest against the New Zealand dollar.
| US dollar | euro | GBP | JPY | CAD | Aud | Nzd | Chf | |
|---|---|---|---|---|---|---|---|---|
| US dollar | 1.04 % | 0.34 % | -0.31 % | -0.32 % | 0.91 % | 0.43 % | 0.01 % | |
| euro | -1.04 % | -0.30 % | -05 % | -05 % | 0.34 % | 0.69 % | 0.28 % | |
| GBP | -0.34 % | 0.30 % | -0.82 % | 0.24 % | 0.64 % | 1.00 % | 0.58 % | |
| JPY | 0.31 % | 0.05 % | 0.82 % | -0.00 % | 1.38 % | 1.66 % | 0.97 % | |
| CAD | 0.32 % | 0.05 % | -0.24 % | 0.00 % | 0.13 % | 0.74 % | 0.33 % | |
| Aud | -0.91 % | -0.34 % | -64 % | -1.38 % | -0.13 % | 0.35 % | -08 % | |
| Nzd | -0.43 % | -69 % | -1.00 % | -1.66 % | -0.74 % | -0.35 % | -0.41 % | |
| Chf | -01 % | -0.28 % | -58 % | -0.97 % | -0.33 % | 0.08 % | 0.41 % |
The heat map shows the percentage changes in the main currencies against each other. The basic currency is chosen from the left column, while the quotation currency is chosen from the top row. For example, if you choose the euro from the left column and move along the horizontal line to the US dollar, the percentage offered in the box will represent EUR (Base)/USD (Quote).
Daily Digest Market Movers: The US/US dollar is declining as the United States begins Trump in the World Trade War
- EUR/USD faces an intense sale of the US dollar (USD). The safe demand for the US dollar has increased significantly, as US President Trump began a trade war. The US dollar index (DXY), which tracks the value of Greenback for six main currencies, exceeds 109.50.
- The US dollar movement is mainly affected by Trump’s comments on global trade. However, investors will also focus on a large number of American economic data, such as the ISM manufacturing and purchase managers (PMI), changing ADP employment, unscrupulous salary companies (NFP) for January, and the opening of Jolts for December, which will be issued this week.
- Investors will pay close attention to the data of the labor market to know its current situation. On Wednesday, the Federal Reserve maintained interest rates at its current levels and directed that the central bank will remain in the waiting position until it sees “real progress in inflation or some weakness in the labor market.”
Technical Analysis: The euro/US dollar is lower than 20 days from EMA
Euro/US dollar dives vertically to approximately 1,0200. Last week, the main currency pair began to decrease after a short -term recovery moved to 1.0533, from which the market participants benefited to add short pants. The pair has decreased less than 20 and 50 days of moving averages (EMAS) around 1.0378 and 1.0440, respectively, indicating a declining direction.
The relative strength index slides for 14 days (RSI) less than 40.00, indicating a strong declining momentum.
Looking at the bottom, the lowest level on January 13 at 1.0177 and round support from 1.0100 will serve as major support areas for the husband. On the contrary, the psychological resistance of 1.0500 will be the main barrier of euro bulls.
Customs fees are common questions
Customs duties are useful customs duties on some imports of goods or a category of products. Customs duties are designed to help local producers and manufacturers to be more competitive in the market by providing the price feature on similar goods that can be imported. Definitions are widely used as fever tools, along with commercial barriers and import shares.
Although customs tariffs and taxes generate government revenues to finance public goods and services, they have many differences. Customs duties are pre -paid in the entry port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while customs duties are paid by importers.
There is a school of thought between economists regarding the use of definitions. While some argue that definitions are necessary to protect local industries and address commercial imbalances, others see them as a harmful tool that can push prices up in the long term and lead to a harmful trade war by encouraging customs tariffs.
During the period before the presidential elections in November 2024, Donald Trump explained that he intends to use the customs tariff to support the American economy and American producers. In 2024, Mexico, China and Canada accounted for 42 % of the total imports of the United States. During this period, Mexico emerged as the best source with $ 466.6 billion, according to the American Statistical Office. Thus, Trump wants to focus on these three countries when imposing definitions. It is also planned to use the revenues created by definitions to reduce personal income taxes.
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