The EUR/USD pair saw a slight uptick, continuing the previous day’s modest gains. On Thursday, it drew in some buyers for a second consecutive day as the US dollar weakened a bit. Still, the prices seemed to lack strong bullish momentum, fluctuating within a range of 1.1815-1.1820 during Asian hours, marking a 0.10% rise for the day.
Even with the Federal Reserve’s assertive stance, USD proponents appeared somewhat hesitant, especially with the ongoing chaos linked to President Donald Trump’s trade decisions. After the Supreme Court’s decision against Trump’s broad tariffs, the US implemented a new 10% global tax on items not exempt from duties, as initially declared by Trump. On top of that, Trump mentioned during his State of the Union address that his administration plans to increase tariffs to 15%.
This announcement has stirred fresh market worries about the economic repercussions of retaliation and potential disruptions to global supply chains. The combination of these fears and a prevailing bullish sentiment seems to be providing support for the EUR/USD, which, in turn, diminishes the appeal of the safe-haven USD. Moreover, the impression that the European Central Bank (ECB) has wrapped up its rate cuts might continue to bolster the euro and potentially open the door for further rate increases.
ECB President Christine Lagarde noted earlier this week that the interest rate policy is in a solid position, reiterating her previous stance that no policy changes are expected. Meanwhile, the European Parliament decided to delay the vote on the EU-US trade agreement, which could temper traders’ enthusiasm to make aggressive bullish moves on the EUR/USD pair. They now seem to be awaiting Lagarde’s upcoming remarks for any hints of new stimulus, especially with US unemployment claims on the horizon.
