- EUR/USD drops to almost 1.0450, because the collection of the American dollar after FED officials have led that there is no need to make political corrections at least for now.
- Nagel EBC warned that President Trump’s tariffs would be more exposed to Germany.
- Investors are waiting for the minutes of FOMC, which will be issued on Wednesday.
EUR/USD decreases to almost 1.0450 in the Tuesday session of North America after it has not remained above the mental resistance of 1.0500 in the last two trade days. The main currency pairs fall due to a certain euro weakness (EUR). The perspectives of the common currency are uncertain because the decision -maker of the European Central Bank (EBC) and the President of the Bundesbank Joachim Nagel warned that the United States tariffs (USA) may apply to German economic perspectives, which have already suffered due to economic contraction for the last two last two years.
“Our strong orientation for export makes us particularly defenseless,” said Nagel in our speech during the lunch of the Union international club speaker on Monday. He added that economic production in 2027 would be almost 1.5% lower than their earlier forecast. Currently, the Bundesbank sees that the German economy is growing by 0.2% this year and 0.8% in 2026.
Fears of American tariffs in Germany escalated after US President Donald Trump announced at the weekend that he was planning to impose tariffs on imported cars from April 2. According to OEC data, the German economy exported cars worth $ 24.3 billion to the USA in 2023.
Meanwhile, the company’s expectations that ECB will reduce interest rates three times more this year also restricted the raise in the euro. ECB BETS BETS is based on a growing risk of inflation emphasizing the goal of a central bank of 2%.
On the economic front in the index of economic moods, the call does not lose its estimates with a subtle margin. Data on sentiments reached 24.2 in February, contrary to market expectations 24.3. In January, the data was evident at 18.0.
The price of the American dollar today
The table below shows a percentage change in the US dollar (USD) compared to the main essential currencies. The American dollar was the strongest in relation to the dollar of New Zealand.
| USD | EUR | GBP | JPy | BOOR | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.32% | 0.21% | 0.23% | 0.14% | 0.24% | 0.69% | 0.11% | |
| EUR | -0.32% | -0.11% | -0.08% | -0.18% | -0.08% | 0.37% | -0.21% | |
| GBP | -0.21% | 0.11% | 0.04% | -0.07% | 0.04% | 0.48% | -0.10% | |
| JPy | -0.23% | 0.08% | -0.04% | -0.11% | -0.01% | 0.42% | -0.14% | |
| BOOR | -0.14% | 0.18% | 0.07% | 0.11% | 0.10% | 0.56% | -0.03% | |
| Aud | -0.24% | 0.08% | -0.04% | 0.00% | -0.10% | 0.44% | -0.15% | |
| NZD | -0.69% | -0.37% | -0.48% | -0.42% | -0.56% | -0.44% | -0.58% | |
| CHF | -0.11% | 0.21% | 0.10% | 0.14% | 0.03% | 0.15% | 0.58% |
The heat map shows percentage changes in the main currencies towards each other. The basic currency is collected from the left, and the quote currency is collected from the upper order. For example, if you choose an American dollar on the left column and move along the horizontal line to Japanese Jen, the percentage shift displayed in the field will represent USD (base)/JPy (quote).
Daily Digest Market Movers: EUR/USD is corrected as Trump’s fears to German economic perspectives
- Corrective movement in Parie EUR/USD is also driven by a recovery movement in American dollars (USD). The American dollar index (DXY), which follows the Greenback value compared to the six main currencies, collections after attracting offers near a two -month low level and recovery up close to 107.00 during press.
- Greenback discovers purchasing interest because investors are considering the expectations that the Federal Reserve (FED) will keep interest rates in the current range 4.25% -4.50% for a longer period. On Monday, a lot of FED officials said that monetary policy does not have to be adapted in the current scenario.
- Fed Governor Michelle Bowman said in her prepared comments at the American Bankers Association conference that she would like to gain “greater trust” that progress in lowering inflation “will continue” when we are considering introducing further corrections. Bowman added that for now a enduring interest rate position also gives the opportunity to review further “business indicators” and obtain further clarity as to the “administration policy and their impact on the economy.”
- Meanwhile, the President of the Fedu Fedu Bank Philadelphia, Patrick Harker, said that there is “reasons” to maintain a “constant rate of politics at the moment”, such as resistant economic growth, sustainable labor market and still even inflation pressure. Harker did not commit himself to the time frame, but he was the optimist that inflation would alleviate over time.
- To get more tips on the perspective of monetary policy, investors will focus on the minutes of the Federal Open Market Committee (FOMC) at the January political meeting, which will be published on Wednesday. At the political meeting, the FED announced a pause in a monetary soothing cycle, which began in September. Fed Chairman Jerome Powell conducted that monetary policy corrections would be appropriate only if officials see “real progress in inflation or at least some weakness on the labor market.”
Technical analysis: EUR/USD departs from 1.0500
EUR/USD will fall after resistance near a psychological obstacle of 1.0500. However, the perspectives of the main currency pair are still stubborn, because it persists above 50-day interpretation of the movable medium (EMA), which is about 1.0430.
The 14-day relative force indicator (RSI) tries to break above 60.00. A liquid rush is activated if RSI (14) manages to keep it above this level.
Looking down, the lowest level 10 February 1,0285 will act as a main steam support zone. And vice versa, the highest level of December 6 1.0630 will be a key barrier to the euro bulls.
