EUR/USD trades in negative territory around 1.0880 in Thursday’s Asian session.
The growing trade war between the US and EU undermines the shared currency.
Investors will closely watch the US February PPI and the weekly Initial Jobless Claim data, which are due later on Wednesday.
The EUR/USD pair loses ground to around 1.0880 during the Asian trading hours on Thursday. The escalating trade tension between the United States and the European Union (EU) exerts some selling pressure on the Euro (EUR) against the Greenback. Traders will take more cues from the US February Producer Price Index (PPI) and the weekly Initial Jobless Claim data, which are due later on Wednesday.
US President Donald Trump said the US would respond to the EU’s countermeasures against his new 25% tariffs on steel and aluminum, raising the risk of further escalation in his global trade war. The European Commission announced retaliatory tariffs Wednesday, saying that its tariffs would apply to US goods worth up to 26 billion euros ($28.4 billion) and cover a wide variety of items, including boats, bourbon, and motorbikes. This measure would take effect on April 1, and a second set of countermeasures expected in mid-April.
However, the downside for the major pair might be capped amid the fear that Trump’s protectionism will push the US economy into recession, weighing on the USD.
"We were also going to get an inflation update, which we did, and inflation is still pretty sticky and it came lighter than expected. I think it was a little bit of a relief for the marketplace, so it improved sentiment. But sentiment is on a very short leash and it can change so quickly based on the headline risks,”said Amarjit Sahota, executive director at Klarity FX in San Francisco.
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