The US dollar depreciated yesterday after the weakest American inflation figures than expected and the EUR/USD exchange rate could rise to its maximum April this morning. At this point, it could spend a lot of time reflecting on whether the reaction was justified, pointing out explanations for the continuous lack of inflationary impetus by US tariffs and trying to interpret the figures from the perspective of the Fed, says Thu Lan Nguyen, Chief of FX Research and CommerzBank Commodities.
The downward potential in EUR/USD will probably continue to be limited
“There was something completely different that was notable especially yesterday’s movement: the ignorance of the news on an agreement in the tariff conflict between the US and China. This left the exchange rate practically cold. The risk that the dispute between the two economic powers will intensify again should now be significantly lower after the agreement, which in itself would be positive for the dollar.”
“It could be argued that an agreement was already on the horizon after the conversations in London and that yesterday’s confirmation, therefore, was no longer news. However, the dollar had not been able to benefit from this perspective at the beginning of the week either. This leaves us with the following explanation: this ‘agreement’, as well as that of the United Kingdom before, it is nothing more than a word of the market. It has simply been confirmed;
“The probability is increasing that the other US business partners cannot ensure concessions on the reciprocal tariff Stronger speculation about rates cuts since yesterday has weighed over the dollar.
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.
