- The EUR/USD shoots new three -year maximums in 1,1473.
- China announces that tariffs rise to US products to 125%.
The EUR/USD rises strongly in the European session on Friday, shooting at new 38 -month maximums in 1,1473 after the Chinese government announced to raise tariffs to US products at 125%. The euro quotes when writing against the dollar over 1,1440, winning an impressive 2.10% in what we have during the day.
The Chinese Finance Minister has announced in the last hour that China will increase additional tariffs on US imports from 84% to 125%, as reported by Reuters. The measure will enter into force on April 12.
This measure is an answer to Donald Trump’s announcement yesterday, which raised the rates to Chinese products to 145%.
The tariff climb between the US and China is affecting the markets, which are quoted in a sea of red at this time. European stock markets record important losses, with the German Dax falling 1.33% and the French CAC 408%. In Asia, the Nikkei 225 index has closed with a fall close to 3%.
Where does the euro go?
The euro reaches in the European morning of this Friday its highest price since the first week of February 2022. Although the tor You will find resistance in 1,1495, ceiling of the year 2022. An overcoming of this level will open the doors to rise above 1,1500 in the direction of 1,1616, Maximum of November 2021.
Down, the pair will find supports in 1,1300, 1,1200 and 1,1100 before finding an important opposition in the 100 -hour mobile average around 1,1035.
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.
