EUR/USD gains traction to near 1.0980 in Thursday’s Asian session.
Germany's Merz unveils coalition deal to boost growth and tackle migration.
Trump announced a 90-day pause on many new tariffs on trading partners.
The EUR/USD pair attracts some buyers to around 1.0980 during the Asian session on Thursday. The Euro (EUR) edges higher against the Greenback as German conservative leader agreed on a coalition deal with the center-left Social Democrats on Wednesday. The US March Consumer Price Index (CPI) inflation report will be the highlight later on Thursday.
On Wednesday, German conservatives under Friedrich Merz clinched a coalition deal with the center-left Social Democrats (SPD) to boost growth in Europe's biggest economy amid a global trade war that threatens recession. This development is likely to lift the shared currency against the US Dollar (USD) in the near term.
The improved sentiment after US President Donald Trump announced a 90-day pause on many new tariffs on trading partners also provides some support to the EUR. US President Donald Trump said on Wednesday that he authorized a 90-day pause on new tariffs for most US trade partners to 10% to allow trade negotiations with those countries.
However, the rising bets that the Federal Reserve (Fed) would deliver more interest rate reductions this year could drag the USD lower. Traders are now pricing in only a 40% possibility of a Fed rate cut in next month’s meeting, despite the recent market volatility, according to the CME FedWatch tool.
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