EUR/USD Forecast: Key Risk Remains Tariffs
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Tariff delays remain dominant force as attention turns to data. Trump‘s last-minute decision to delay 25% tariffs on Canada and Mexico, following discussions with their leaders, triggered a sharp reversal in the US dollar. The news also buoyed risk assets and provided some much-needed relief for the euro.
Tariff threat bruises euro, Australian and Canadian dollars. Fresh threats of tariffs from U.S. president Donald Trump put pressure on the euro and the Australian and Canadian dollars in early Monday trading, though moves were less dramatic than last week’s.
EUR/USD remains firm as Trump raises tariffs cautiously. EUR/USD remains firm above 1.0400 as US President Donald Trump has announced lower-than-anticipated tariffs on China.ECB’s Lagarde warned that the Euro bloc should be prepared for US tariffs.
Daily graph of the EUR/USD course - Key levels
EUR/USD Forecast: Key Risk Remains Tariffs
Tariff delays remain a dominant force as attention turns to data. A recent tariff-related declaration from President-elect Donald Trump, involving a delay in imposing 25% tariffs on Canyon and Mexico due to discussions with their leaders, led to a sharp reversal in the U.S. dollar. This news also benefitted risk assets and provided some much-needed relief for the euro. The implications for the international currencies have been profound as the Understanding Trump Tariffs 2.0 policy emphasizes the importance of tariffs in the trade policies going forward.
The threat of tariffs from U.S. President Donald Trump has put meaningful pressure on the euro, the Australian dollar, and the Canadian dollar. Recent market dynamics show that fresh threats of tariffs bruise these currencies, with earlier threats in 2024 causing dramatic moves [[1]]. The forecasts indicate that currency movements continue to be largely influenced by these trade policies as decisions like these demonstrate the impact on global trade and financial markets.
Accordingly, the EUR/USD exchange rate remains firm as President Donald Trump has announced lower-than-anticipated tariffs on China. The European Central Bank’s (ECB) President Christine Lagarde has warned that the Euro bloc should be prepared for U.S. tariffs, stressing the need for economic foresight and planning. The markets responded positively to the news of cautious tariff implementation, indicating that even moderate tariff decisions can have significant impacts on currency values and risk assets.
