The EUR/USD pair has seen a decline after an initial rise, currently trading around 1.1860 during Asian hours on Monday. Eyes are on Germany’s IFO report due later today.
This downward trend seems linked to a stronger US dollar, driven by safe-haven demand—possibly influenced by some recent remarks from US President Donald Trump. Over the weekend, he hinted at imposing hefty tariffs on Canadian goods if Canada finalizes a trade agreement with China, as reported by the BBC.
In light of this, Canadian Prime Minister Mark Carney stated on Sunday that Canada isn’t looking to establish a free trade deal with China, clarifying that their recent agreement merely reduced tariffs in specific impacted sectors.
On the flip side, the dollar faced some pressure amid speculation about potential intervention in the foreign exchange market to bolster the Japanese yen. Bloomberg mentioned that traders observed the New York Fed performing interest rate checks with major banks, which many interpret as a sign of potential intervention preparation by authorities.
The preliminary Eurozone PMI for January pointed to some weakness in the services sector, with the index dropping to 51.9, lower than both December’s figure and market forecasts. In contrast, Germany’s earlier announcements showed more positive signs; the services PMI exceeded expectations and stayed in expansion territory, while the manufacturing PMI improved yet still fell short of expansion levels.
