EUR/USD shed 0.25% on Wednesday after new tariff threats hit newswires.
US President Trump insists 25% tariffs are coming for the EU.
Key US inflation figures are set to close out the week.
EUR/USD pulled back on Wednesday, shedding around one-quarter of one percent after US President Donald Trump insisted that tariffs are coming for the European Union too, not just Canada and Mexico.
Always eager to capitalize on opportunities, President Trump introduced new tariff threats on Wednesday, extending proposed import taxes to include a 25% tariff on European goods. While details are still vague, he outlined his intention to impose further tariffs on European products, specifically mentioning “cars and other items." He reiterated that the US does not “need” Canadian crude oil or lumber, stating that there will be tariff packages of 25% on both Canada and Mexico. Nevertheless, he again delayed the implementation, revealing that the confirmed tariffs on Canada and Mexico will take effect on April 2nd.
Forex Today: Markets’ attention remains on US economy and tariffs
The group of nations not facing tariff threats from the White House is rapidly diminishing. Should a full-scale trade war unfold, the Euro has now been added to the list of vulnerable currencies that may experience increased volatility due to shifting risk sentiment, as investors struggle to keep pace with the frequent updates emanating from the White House.
This week, UK data is relatively sparse, but a wealth of US data is available for investors to analyze as the trading week progresses. On Thursday, US Gross Domestic Product (GDP) growth figures for the fourth quarter of 2024 will be released, along with updates on Durable Goods orders for January.
The most significant data point this week will be the US Personal Consumption Expenditure (PCE) inflation report set for Friday. Inflation indicators in the US spiked at the beginning of 2025, and investors are looking for evidence that any immediate inflationary pressures do not seep into core inflation metrics.
EUR/USD continues to churn on the high side, but top-end momentum remains tepid. The pair is holding north of the 50-day Exponential Moving Average (EMA) at 1.0450, but a hard barrier is priced in from the 1.0550 level.
EUR/USD daily chart
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