Euro fell in European trade on Wednesday on track for the third loss in a row against the US dollar, amid a tense atmosphere before US President Donald Trump’s new reciprocal tariffs later today.
Trump will likely announce strict new tariffs on the EU, threatening economic and trade activities in the eurozone, and targeting vital industries such as cars and industrial products, which represent major portions of EU exports to the US.
The Price
The EUR/USD price fell 0.1% today to $1.0785, with a session-high at $1.0808.
The pair closed down 0.2% on Tuesday, the second loss in a row as eurozone inflation slow down in March.
Trump’s Tariffs
Trump is scheduled to announce new total and aggressive tariffs later today, aimed at all countries, which would reshape global trade and expand the scope of the trade war.
The tariffs will be applied immediately following Trump’s speech and aimed at any country that imposes tariffs on US products, with Trump calling it “Liberation day”.
It’s part of Trump’s America First strategy, which included 25% tariffs on imported steel and aluminum, then 25% tariffs on auto imports.
The tariffs were met with severe criticism from the EU, Canada, China, and other US trade partners, with some planning retaliatory tariffs on US products.
European Commission President Ursula von der Leyen said the EU is open to negotiate with the US on trade, but will respond strongly if needed.
ECB President Christine Lagarde said the prospect of US tariffs represents the start of an independence pathway for Europe.
European Rates
Recent data showed the eurozone inflation rates fell in March, reducing inflationary pressures on ECB policymakers.
Following the data, the odds of an ECB 0.25% rate cut in April fell from 43% to 48%.
