- The EUR/USD fell 0.3% on Thursday while Europe joins the Trump tariff list.
- Trump plans more tariffs on EU specific products after Europe responded to tariffs on steel.
- The feeling of the US consumer and inflation expectations dominate Friday’s data agenda.
The EUR/USD cut a little more about its recent profits on Thursday, falling around a third of one percent while Europe prepares for a prolonged pull and loosen on commercial tariffs with US president, Donald Trump. The Trump administration initiated a 25% global import tax over the entire steel and aluminum that crosses the border to the US Harley Davidson and the American distilled whiskey, which caused an explosion of anger of President Trump on Thursday.
The US president Trump wants to impose tariffs on the EU wine, reiterates interest in Greenlandia
Donald Trump threatened to impose a 200% tariff on all European wines and champanes through their social networks during the first US session on Thursday, which generated generalized concerns in the market that the Trump administration is directed towards a disastrous result due to its clumsy commercial policies that do not seem to serve a function or purpose. Now, US markets focus on consumer trust readings and inflation expectations on Friday, which arrive at a time when the average US consumer is increasingly worried about the rhetoric that filters both of the White House and Donald Trump’s social media accounts.
The inflation figures of the Harmonized Consumer Price Index (HICP) of February will be published early on Friday, however, the final, non -preliminary figure, is unlikely to attract attention. On Friday, the US data agenda will close a relatively full week with the consumer’s feeling index of the University of Michigan (UOM) as well as the UOM consumer inflation expectations. Both figures will probably see some negative influence of the tariff outbursts of President Trump, and the medium forecasts of the market see the feeling index decreasing to 63.1 to March, from February 64.7. In the last impression, the average consumer surveyed expected 5 -year inflation to be around 3.5%, which implies that inflation expectations remain deeply rooted above the 2% target of the Federal Reserve (Fed).
EUR/USD price forecast
The EUR/USD seems that its recent bullish career is over, confirming a technical setback below 1,0900 as fast as it jumped to the main area first. However, the torque has risen almost 7.6% since the last important minimum about 1,0175, with the bulls easily exceeding the 200 -day exponential mobile average (EMA) in the process.
The EUR/USD now faces a technical resistance in the 1,0900 zone, a technical region that baffled the uprisers of the euro the last time it happened, in October and November last year.
EUR/USD daily graphics
Euro Faqs
The euro is the currency of the 19 countries of the European Union that belong to the Eurozone. It is the second most negotiated currency in the world, behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily business volume of more than 2.2 billion dollars a day. The EUR/USD is the most negotiated currency pair in the world, with an estimate of 30 %of all transactions, followed by the EUR/JPY (4 %), the EUR/GBP (3 %) and the EUR/AU (2 %).
The European Central Bank (ECB), based in Frankfurt (Germany), is the Eurozone reserve bank. The ECB establishes interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means controlling inflation or stimulating growth. Its main tool is the rise or decrease in interest rates. Relatively high interest rates (or the expectation of higher types) usually benefit the euro and vice versa. The GOVERNMENT BOOK of the ECB makes decisions about monetary policy in meetings that are held eight times a year. The decisions are made by the directors of the National Banks of the Eurozone and six permanent members, including the president of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the harmonized consumer prices index (IPCA), are an important economic indicator for the euro. If inflation increases more than expected, especially if it exceeds 2% of the ECB, it forces the ECB to rise interest rates to control it again. Relatively high interest rates compared to their counterparts usually benefit the euro, since they make the region more attractive as a place for global investors to deposit their money.
Published data measure the health of the economy and can have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer trust surveys can influence the direction of the single currency. A strong economy is good for the euro. Not only attracts more foreign investment, but it can encourage the ECB to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the euro is likely to fall. The economic data of the four largest economies in the euro zone (Germany, France, Italy and Spain) are especially significant, since they represent 75% of the economy of the euro area.
Another important fact that is published on the euro is the commercial balance. This indicator measures the difference between what a country earns with its exports and what you spend on imports during a given period. If a country produces highly demanded export products, its currency will gain value simply by the additional demand created by foreign buyers seeking to buy those goods. Therefore, a positive net trade balance strengthens a currency and vice versa in the case of a negative balance
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
