- Since the Fed is not in a rush to lower interest rates anytime soon, the EUR/USD drops to about 1.0815.
- The tariff policies of US President Trump may cause cost-push inflation on a worldwide scale.
- ECB Lagarde anticipates that possible Trump-driven inflation in the Eurozone won’t last.
During Friday’s European session, EUR/USD trades down, approaching the 10-day low of 1.0815. Selling pressure is applied to the major currency pair as the US dollar (USD) gains strength following the Federal Reserve’s (Fed) statement that interest rate cuts are not currently an option. The US Dollar Index (DXY), which measures the value of the US dollar relative to six other major currencies, increases to over 104.15.
As anticipated, the Fed maintained interest rates in the 4.25%–4.50% range on Wednesday for the second consecutive time. During the news conference, Fed Chair Jerome Powell stated that the central bank will not be in a “hurry” to implement “interest rate cuts.” He cited “unusually elevated” uncertainty regarding the US economy as the reason for his remarks in favor of a restrictive monetary policy stance.
Powell noted that US President Donald Trump’s new policies may cause the economy to slow down and inflationary pressures to rise again shortly.
Investors are looking for significant changes on Trump’s April 2 reciprocal tariff plan. Market investors anticipate that tariffs may have an impact on global price pressures and economic development. Manufacturers will be compelled to underuse their production capacity globally, which may lead to a new rise in cost-push inflation.
On the economic front, investors will be watching Monday for the release of the flash US S&P Global Purchasing Managers Index (PMI) data for March.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | 0.19% | 0.15% | 0.10% | 0.20% | -0.07% | -0.09% | |
| EUR | -0.13% | 0.08% | 0.02% | 0.00% | 0.08% | -0.13% | -0.22% | |
| GBP | -0.19% | -0.08% | -0.04% | -0.08% | 0.00% | -0.21% | -0.29% | |
| JPY | -0.15% | -0.02% | 0.04% | -0.05% | 0.05% | -0.19% | -0.29% | |
| CAD | -0.10% | -0.00% | 0.08% | 0.05% | 0.08% | -0.13% | -0.21% | |
| AUD | -0.20% | -0.08% | 0.00% | -0.05% | -0.08% | -0.21% | -0.39% | |
| NZD | 0.07% | 0.13% | 0.21% | 0.19% | 0.13% | 0.21% | -0.08% | |
| CHF | 0.09% | 0.22% | 0.29% | 0.29% | 0.21% | 0.39% | 0.08% |
Daily digest market movers: EUR/USD weakens as Euro drops, US Dollar gains
Weakness in the Euro (EUR) is another factor driving the EUR/USD pair’s downward movement. As investors anticipate that US President Trump’s reciprocal tariffs will have a substantial impact on the Eurozone’s economic growth, the main currency underperforms its rivals.
Christine Lagarde, the president of the European Central Bank, has also tempered concerns over steadily rising Eurozone inflation and issued a warning about the negative economic risks associated with the Trump-led trade war. Speaking before the European Parliament Committee on Thursday, Lagarde stated that the trade war’s inflationary effects would “ease in the medium term” as “lower economic activity dampens inflationary pressures.”
Germany, one of the US’s top trading partners, is predicted to suffer the most from Trump’s reciprocal tariffs. The Eurozone imposes a 10% duty on German automobile imports, whereas the US imposes a 2.5% levy. Trump has so far threatened to put 25% tariffs on cars made in other countries and to shortly implement reciprocal duties. Investors want to know if 10% or 25% tariffs will be applied to German automobiles by the US.
It is anticipated that the Bundestag lower house of parliament’s acceptance of the billions of euros that will be injected into the German economy through the extension of the borrowing limit will shield the country’s economy from any US tariff concerns.
Technical Analysis: EUR/USD slides to near 1.0800
After failing to maintain the crucial level of 1.0900, EUR/USD drops to about 1.0815. Nonetheless, the major currency pair’s long-term outlook remains bullish because it remains above the 200-day Exponential Moving Average (EMA), which is currently trading at 1.0664.
Following a clear breach over the December 6 high of 1.0630 on March 5, the pair gained strength.
The 14-day Relative Strength Index (RSI) cools down after turning overbought around 75.00, suggesting that the bullish momentum has moderated, but the upside bias remains intact.