EUR/USD decreases like a USA, 90-day signals of a pause in the implementation of Trump tariffs

EUR/USD weakens when the US dollar enlivens losses after the USSETT USSETT signaled a 90-day pause to apply a tariff to everyone, except for China.
Analysts from JP Morgan expect that the American economy will make an appointment by 0.3% due to the implementation of Trump’s full tariff.
EBC Schnabel expects more Trump tariffs to drive uncertainty even more.

EUR/USD Recovers some end -up losses to almost 1.0940 in the North American trade hour on Monday after moving about 1.0880 earlier on the same day. The main currency pair still dropped by almost 0.25%at the time of writing, because the US dollar (USD) is gaining after regaining losses. The American dollar index (DXY), which follows the Greenback value compared to the six main currencies, jumps to nearly 103.20.

Greenback attracts offers as the director of the United States National Economic Council (USA) Kevin Hassett signaled that President Donald Trump is considering a 90-day tariff pause for all his trading partners, except China, Reuters. However, the White House did not confirm the same. A three -month break on tariffs would provide a significant time for targeted nations to avoid higher import duties by negotiating a contract with Washington.

Such a scenario will be beneficial for the American economy, which attracts the reductions of market experts for the US President Trump, which protrudes mutual tariffs on Wednesday.

The up-to-date package of fees announced by Trump scared global markets, which caused the shares to melt all over the world. However, Trump did not worry that investors were losing trillions from the global stock market and expected higher fees to bring a lot of money in the US every year. “I don’t want anything to fall. But sometimes you have to take a cure to fix something,” Trump said during a speech at Air Force One on the weekend.

Market experts have become more and more concerned about the USA Economic perspectivesAssuming that the real burden on higher import duties will be on national importers. Investment Banking Company JP Morgan forecasted that the US economy could end a year with a decrease in 0.3% Gross domestic product (GDP) Growth.

Also chairman of the Federal Reserve (FED) Jerome Powell On Friday, he stated that the president’s patronist policy could lead to an escalate in inflationary pressure and slower economic growth. Powell still supports interest rates in the current range 4.25% -4.50%, because “they said too early, which will be the right path for monetary policy.”

In European commercial hours, Donald Trump called the FED to start lowering interest rates, because the conditions became favorable, although his post about the truth. “Oil prices are falling, interest rates have dropped (slow removals Fed If rates are reduced!), Food prices are falling, there is no inflation, and the US used for a long time brings billions of dollars a week from countries abusing to the tariff, which are already there, “wrote Trump.

Daily Digest Market Movers: EUR/USD falls like a collection of an American dollar

The disadvantage of EUR/USD is also caused by uncertainty as to the euro perspective (EUR). It is expected that the euro will face pressure because officials of the European Central Bank (ECB) have rejected the fears that the tariff -based inflation will last in the euro area, enabling traders to raise plants supporting more interest rates this year.
Isabel Schnabel, a member of the ECB board, said at the weekend at the Economic Forum in Northern Italy that the up-to-date US tariffs have worsened the euro area’s structural economic winds. Schnabel warned that the higher US import duties led to a “dramatic increase in uncertainty” and should prepare for more.
EBC has already reduced its key loans at both two politics meetings this year, and it is expected to be reduced again on April 17. The central bank will probably continue the gradual pace of weakening of monetary policy, which will reduce the deposit rate to 2.25%. This scenario will be unfavorable for the euro.
In European commercial hours, Eurostat announced that retail sales increased at a slower pace monthly in February. Retail sales, a key measure of consumer expenditure, increased by 0.3%, slower than estimates at 0.5%, after remaining flat in January. In the year, the measure of consumer expenditure increased by 2.3%, stronger than expectations and earlier edition of 2.3%.
On the global front, the President of the European Commissioner (EC) von der Leyen in a North American commercial situation commented that we are ready to “negotiate from the USA on tariffs”, and the nation intends to strengthen in response to Trump’s tariffs. Separately, Maros Sefcovic, Commissioner for Trade of the European Union, said: “We offered American zero tariffs zero for cars and all industrial goods.” Positive trials of the euro area in order to reduce the fears of a potential trade war from the US will relieve the fears of domestic growth.

Technical analysis: EUR/USD finds support near the 10-day EMA

EUR/USD He resumes his journey up after a fit correction from a six -month maximum 1.1145, on Thursday to 1.0880 earlier the same day. The main currency pair is reflected as a 10-day interpretation average (EMA), acts as the main support of about 1.0886. The couple aims to maintain key support 1.0938 deleted from the height of November 5.

The 14-day relative strength indicator (RSI) remains above 60.00, which suggests that the stubborn shoot is intact.

Looking down, the highest level of March 31 1.0850 will act as the main support zone for the couple. And vice versa, the highest level of September 25 1.1214 will be a key barrier to the euro bulls.

FAQ in American dollars

The American dollar (USD) is the official currency of the United States of America and the “de facto” currency of a significant number of other countries where it is in circulation with local notes. It is most often a commercial currency in the world, which is over 88% of all global currency turnover, i.e. an average of $ 6.6 trillion of transactions per day, according to the data from 2022. After the Second World War, USD took over from the British pound as the reserve currency of the world. For most of its history, the American dollar was supported by gold, up to the Bretton Woods agreement in 1971, when the golden standard disappeared.

The most critical single factor affecting the value of the American dollar is the monetary policy, which is shaped by the Federal Reserve (FED). The Fed has two seats: achieving price stability (control inflation) and supporting full employment. Its main tool to achieve these two goals is to adjust interest rates. When the prices rise too quickly and inflation is above 2% of the Fed target, the FED will escalate the rates, which helps USD values. When inflation drops below 2% or the unemployment rate is too high, the Fed may reduce interest rates that are weighing in the green area.

In extreme situations, the Federal Reserve can also print more dollars and introduce quantitative alleviation (QE). QE is a process in which the Fed significantly increases the credit flow in the detained financial system. It is a non -standard policy measure used in the event of a loan parched, because the banks will not borrow (for fear of the contractor). This is the last last, when just lowering interest rates is unlikely to achieve the necessary result. The weapon of choosing the Fed was a FED weapon to combat the credit crisis, which took place during the great financial crisis in 2008. This includes FED printing more dollars and using them to buy US government bonds mainly from financial institutions. QE usually leads to a weaker American dollar.

Quantitative twist (QT) is the opposite process in which the federal reserve stops buying bonds from financial institutions and does not reinvest from the bonds that it has in up-to-date purchases. This is usually positive for the American dollar.

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