- EUR/USD advances in a low liquidity session while the markets react to Trump’s ‘great and beautiful bill’.
- The US dollar erases profits as debt sustainability problems and renewed tariff threats weigh on the dollar.
- EUR/USD rises while the bulls remain anxious to re -test the level of psychological resistance in 1,1800.
The euro (EUR) maintains modest profits against the US dollar (USD) under limited negotiation conditions on Friday. With US markets closed by Independence Day, liquidity is limited.
The new holders on the tariffs proposed by President Trump and the US fiscal policy are weighing on the US dollar, with the EUR/USD approaching 1,1780 at the time of writing.
The attention remains focused on the deadline of July 9 for the new US commercial tariffs. This follows the statement of President Trump that the letters that describe the requirements for each country to do business with the United States will be sent as soon as Friday.
The proposed tariffs, which range between 10% and 70%, could go into force as soon as on August 1, climbing commercial tensions between the US and its partners, particularly the European Union (EU).
Although the EU agreed earlier this week a 10%global tariff introduced into the ‘Day of Liberation’ in April, concerns about aluminum and steel tariffs persist, currently set at 50%, as well as about car -related imports, which face 25%tariffs.
The latter is particularly worrying for Germany, the largest economy in the EU, whose manufacturing sector, very dependent on exports, is vulnerable to the increase in protectionism.
The markets are also evaluating the implications of the new spending and tax legislation, which is currently addressed to the White House for President Trump to sign as law.
Although the ‘great and beautiful bill’ makes significant cuts to green energy initiatives, also generates concerns about the health of the US fiscal policy. The Congress Budget Office (CBO) estimates that the bill could increase the national deficit by 3.3 billion dollars during the next decade, while it is projected that the debt roof increases by approximately 5 billion dollars.
EUR/USD rises to 1,1800 with the RSI threatening overcompra territory
Technically, the EUR/USD remains in a firm upward trend, although some consolidation signs have emerged. The torque is maintained above its simple mobile (SMA) of 10 days in 1,1720, and comfortably above the 20 -day SMA in 1,1610, both providing support for the torque.
The resistance remains in 1,1800, which could open the door for a thrust towards the recent maximum of 1,1830. The Relative Force Index (RSI), just below 70, indicates overstrust conditions. This suggests a strong bullish impulse but also a potential for a short -term setback or lateral movement if the foundations support the US dollar.
Tariffs – Frequently Questions
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
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.
