- The EUR/USD moved down on Monday, since possible commercial tensions weighed on the feeling of the market.
- President Donald Trump announced plans to start a 100% tariff on films produced abroad, which generates concerns about increasing protectionist policies.
- The harmonized consumer price index of the Eurozone remained stable at 2.2% year -on -year in April, slightly above the 2.1% expected.
The EUR/USD begins the week with a weaker tone, quoting about 1,1320 during Monday’s Asian session. The president of the USA, Donald Trump, confirmed that he would not seek to dismiss the president of the Federal Reserve (Fed), Jerome Powell, before he finished his mandate in May 2026. Although Trump criticized Powell, calling him “a rigid total,” he reiterated that interest rates should eventually be reduced.
In addition, the Eur/USD pair faces winds possibly for potential commercial tensions. Trump announced plans to instruct the US trade representative and the Department of Commerce to begin the process of imposing a 100% tariff on the films produced abroad.
In the data front, the US Non -Agricultural Payroll (NFP) report showed a stronger increase of 177,000 jobs in April, after a revised increase of 185,000 in March. This exceeded market forecast of 130,000. The unemployment rate remained stable at 4.2%, while the average hourly profits were maintained at 3.8% year -on -year. Later in the day, the operators will be attentive to the PMI of services of the US ISM to obtain more address.
The euro found some support on Friday after the strongest eurozone inflation figures than expected. The harmonized consumer price index remained stable at 2.2% year -on -year in April, slightly above 2.1% forecast. The inflation of services accelerated to 3.9%, and the underlying inflation (excluding food and energy) rose to 2.7%, both above expectations. These readings reinforced market expectations for a cumulative cut of 60 basic points (PBS) in the fees of the European Central Bank (ECB) by the end of the year.
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.
