- The EUR/USD dropped on Monday amid concerns over potential trade tensions.
- President Donald Trump revealed plans for 100% tariffs on diplomatic production films, raising alarms about protectionist measures.
- The eurozone’s harmonized consumer price index held steady at 2.2% year-on-year in April, slightly exceeding the anticipated 2.1%.
The EUR/USD hovered around 1.1320 during Monday’s Asian session. Notably, President Trump confirmed he won’t attempt to remove Federal Reserve Chairman Jerome Powell before his term concludes in May 2026.
Additionally, the EUR/USD pair is facing potential hurdles from trade tensions. Trump has instructed US trade representatives and the Commerce Department to start a process of imposing a 100% tariff on diplomatic production films.
On a positive note, 177,000 jobs were added in April, surpassing market expectations of 130,000, following a revised gain of 185,000 in March. The unemployment rate remained unchanged at 4.2%, while average hourly earnings rose by 3.8% year-on-year. Traders will also keep an eye on the US ISM Services PMI later for further insights.
On Friday, the euro received a boost from unexpectedly strong eurozone inflation figures. The harmonized consumer price index remained stable at 2.2% year-on-year in April, slightly above the forecasted 2.1%. Service inflation surged to 3.9%, and core inflation (excluding food and energy) rose to 2.7%, both exceeding expectations. These figures have heightened market forecasts for a cumulative 60 basis points of European Central Bank (ECB) rate increases by year’s end.
