- EUR/USD increases higher to almost 1.0820 before the US President Trump’s President about mutual tariffs.
- Anxiety associated with Trump’s tariffs weakened the trust of American companies and households.
- SOFT HICP data from the euro area pave the way for more ECB interest rates.
EUR/USD increases to almost 1.0820 in the North American trade hour on Wednesday. The main currency pair gains with the escalate in the US dollar (USD) before the announcement of mutual tariffs by the President of the United States (USA) Trump at 20:00 GMT. The American dollar index (DXY), which follows the Greenback value compared to the six main currencies, drops to almost 104.00.
Investors expect that Trump’s tariffs will also be unfavorable to the American economy, taking into account the deterioration of consumers and business trust. The ISM (PMI) production managers index (PMI) also showed on Tuesday that business activities concluded a contract in March after the extension for two plain months. “The demand and production withdrew, and Destaffing continued when panelist companies reacted to the confusion of demand,” said Timothy Fiore, chairman of ISM.
The modern Apartment of the US President Trump is expected to enter immediately after the announcement. This scenario will escalate the global trade system, thanks to which the products of countries that will attract higher tariffs, less competitive. Higher import duties will also leisurely down global business investments, because companies would have difficulty determining the perspective of demand for their products.
Comments of the US Secretary of Treasury Scott Bessent on Tuesday also indicate that the president will impose the highest level of fees on his trading partners and stated that target countries can transfer them, meeting the US requirements, especially by reducing the rates of imports from the US.
Meanwhile, data on the change of employment ADP in March was better than expected. Private American employers added 155,000 Employees, much higher than the estimates of 105,000 And earlier 84K edition, changed above from 77 thousand.
The price of the American dollar today
The table below shows a percentage change in the US dollar (USD) compared to the main critical currencies. The American dollar was the strongest in relation to the Canadian dollar.
| USD | EUR | GBP | JPy | BOOR | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.58% | -0.35% | -0.01% | 0.01% | -0.46% | -0.77% | -0.18% | |
| EUR | 0.58% | 0.25% | 0.55% | 0.59% | 0.14% | -0.21% | 0.41% | |
| GBP | 0.35% | -0.25% | 0.35% | 0.36% | -0.11% | -0.43% | 0.16% | |
| JPy | 0.01% | -0.55% | -0.35% | -0.01% | -0.48% | -0.80% | -0.20% | |
| BOOR | -0.01% | -0.59% | -0.36% | 0.01% | -0.47% | -0.77% | -0.19% | |
| Aud | 0.46% | -0.14% | 0.11% | 0.48% | 0.47% | -0.32% | 0.27% | |
| NZD | 0.77% | 0.21% | 0.43% | 0.80% | 0.77% | 0.32% | 0.60% | |
| CHF | 0.18% | -0.41% | -0.16% | 0.20% | 0.19% | -0.27% | -0.60% |
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 rises among the weaknesses of the American dollar
- EUR/USD is increasing, although investors expect the European Union (EU) to be one of the leading US trading partners that will attract the highest tariffs. US President Donald Trump said the EU several times for unfair commercial practices from the USA. Trump blamed the euro area for not buying a sufficient number of American goods.
- The huge powerful Trump tariffs on the euro area will significantly affect the region’s economic perspectives. Last week, the President of EBC Christine Lagarde said that the trade war could subtract 0.5% from the growth of the economic block. Lower economic growth and relief of inflationary pressure in the euro area would escalate the expectations that the European Central Bank (EBC) will reduce interest rates at the Policy Assembly this month.
- On Tuesday, Eurostat announced that the basic harmonized consumer price indicator (HICP) – which excludes unstable items such as food, energy, alcohol and tobacco – increased at a slower rate of 2.4% within 12 months to March, compared to 2.5% estimates and earlier release of 2.6%. On Wednesday, in European commercial hours, Christine Lagarde also probably sounded in an interview at the Irish Newstalk radio station that the fight against inflation would end soon. “There is still some work on inflation, but it’s very close to the goal,” said Lagarde.
- The euro zone perspectives may be worse if the EU committee shows retaliation against the Trump tariff. The President of the European Commission Ursula von der Leyen warned on Tuesday: “We do not necessarily want to take revenge, but if necessary, we have a strong plan and we will use it.” Von der Leyen added that all instruments for remedies are “on the table” and that we have the power to “push against American tariffs.”
Technical analysis: EUR/USD has a key level of 1.0800
EUR/USD is marked above, but remains in Tuesday, trading around 1.0800 at the time of writing on Wednesday. The 20-day interpretation average (EMA) still provides support for a pair of about 1.0778.
The 14-day relative strength indicator (RSI) cools below 60.00, which suggests that the stubborn momentum is over, but the deviation of the advantage is intact.
Looking down, the highest level of December 6 1.0630 will act as the main support zone for the couple. And vice versa, the 1.1000 psychological level will be a key barrier to the euro bulls.
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