- The EUR/USD shows a strength of around 1.0500 as positive developments to end the war in Ukraine improved the appeal of the Euro.
- The ECB is expected to cut interest rates by 25 bps on Thursday.
- President Trump has imposed 25% tariffs on Canada and Mexico, and another 10% on China.
EUR/USD is slightly above the 1.0500 key level for Tuesday's European session. The major currency pairs remain solid as European leaders, including Ukrainian President Voldimi Zelensky. Assuming a ceasefire between Russia and Kiev will restore the fractured supply chains in the Eurozone, European preparations to stop the Ukrainian massacre have improved the appeal of the Euro (EUR).
This week, the main trigger for the euro is the European Central Bank (ECB) monetary policy decision scheduled for Thursday.
According to a Reuters poll from February 19-27, the ECB will cut deposit facility fees to 2.5% to 25 basis points (BPS). This is the fifth interest rate cut by the ECB, the sixth since the central bank began its easing cycle in June 2024, and the Dovish vote on the ECB's interest rate decisions was spurred by fear that the tariff agenda of US President Donald Trump would damage eurozone economic growth.
Additionally, ECB officials are confident that inflationary pressures will continue to return to their desired rate of 2% this year.
Investors will pay close attention to the monetary policy statement and the press conference of ECB President Christine Lagarde after the policy decision. Market participants want to know when the ECB will return to its neutral stance and how Trump's tariff agenda will affect the inflation outlook.
Daily Digest Market Mover: EUR/USD exploits weakness in the US dollar
- The EUR/USD will rise above 1.0500 as the US dollar (USD) falls below Monday's low despite fresh tariffs by the US presidents of Canada and Mexico and additional taxes in China on Tuesday. The US Dollar Index (DXY), which tracks the value of greenbacks against six major currencies, is slumped near 106.25.
- President Trump has imposed a 25% tariff on North American partners and an additional 10% on China to pour fentanyl into the United States. Trump told reporters Monday, “There are no rooms left in Mexico or Canada.” He said, “Taxes, you know, they're all set. They'll come into effect tomorrow.”
- In retaliation, China has also slapped tariffs on various agricultural imports from the United States, which will take effect on March 10th. The imposition of tariffs by the US on China and its neighbors confirmed the World Trade War. This scenario is unfavourable for the global economic outlook.
- Meanwhile, investors expect Trump's tariff agenda to be inflation in the US economy. This assumes that the impact of higher taxes will be borne by US importers who are forced to pass higher input costs to consumers.
- In terms of economic data, investors are looking forward to US labor market-related data and the release of ISM services PMI this week. Investors pay close attention to US economic data. This is because it affects market estimates regarding the Federal Reserve's monetary policy outlook.
Today's US Dollar Price
The table below shows the rate of change in the US dollar (USD) against today's listed currencies. The US dollar was the strongest against the Australian dollar.
| USD | EUR | GBP | JPY | CAD | aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.27% | -0.20% | -0.43% | -0.54% | -0.03% | -0.18% | -0.51% | |
| EUR | 0.27% | 0.07% | -0.11% | -0.27% | 0.24% | 0.09% | -0.28% | |
| GBP | 0.20% | -0.07% | -0.21% | -0.34% | 0.17% | 0.02% | -0.33% | |
| JPY | 0.43% | 0.11% | 0.21% | -0.14% | 0.38% | 0.22% | -0.12% | |
| CAD | 0.54% | 0.27% | 0.34% | 0.14% | 0.51% | 0.37% | 0.00% | |
| aud | 0.03% | -0.24% | -0.17% | -0.38% | -0.51% | -0.15% | -0.51% | |
| NZD | 0.18% | -0.09% | -0.02% | -0.22% | -0.37% | 0.15% | -0.35% | |
| CHF | 0.51% | 0.28% | 0.33% | 0.12% | -0.00% | 0.51% | 0.35% |
The heatmap shows the rate of change of each other's major currencies. The base currency is selected from the left column, and the estimated currency is selected from the top row. For example, if you select US dollars from the left column and move along the horizon to Japanese Yen, the rate of change shown in the box represents USD (base)/JPY (QUOTE).
Technical Analysis: EUR/USD Approach 1.0600
EUR/USD will trade nearly 1.0500 companies during European trading hours on Tuesday. The major currency pairs trade above the 20-day index moving average (EMA) around 1.0440, suggesting that the short-term trend is bullish.
The 14-day relative strength index (RSI) oscillates within the range of 40.00-60.00. This indicates a horizontal trend.
Looking down, 1.0285 Low on February 10th serves as the pair's main support zone. Conversely, the highest value of 1.0630 on December 6th would be an important barrier for the Eurobulls.
