- EUR/USD briefly corrects below 1,1400 while the US dollar bounces after Trump appeals the fears about the possible dismissal of Powell and the intense tariff war with China.
- Trump says that tariffs to China will not be as high as 145%.
- The PMI of the Eurozone suggests that the economy barely grew in April while the activity of the services sector contracts.
EUR/USD is negled quite stable on Wednesday after falling well below 1,1400 earlier in European negotiation hours. The main currency pair moves away from its maximum of more than three years of 1,1575 while the US dollar (USD) bounces. The American dollar index (DXY), which follows the value of the green ticket compared to six main currencies, has recovered at about 99.30 since its minimum of three years of 98.00.
The USD attracts offers after the president of the United States (USA), Donald Trump, expressed confidence in closing a commercial agreement with China and away the fears of saying goodbye to the president of the Federal Reserve (Fed), Jerome Powell. However, he said he was still frustrated by the Fed decision to maintain interest rates without changes for an uncertain period of time.
The participants of the financial market see this event as an attempt to recover the status of “safe refuge” of the US dollar. Investors had been doubting the credibility of the US dollar and US assets due to contradictory announcements about Donald Trump’s tariff policies and their attacks on the Autonomous Status of the Fed.
On Tuesday, President Trump declared that the discussions with China are going well, adding that he believes they will reach an agreement. Trump did not provide clarity about how much the tariff to China will reduce, but clarified that The pekin tariff “would not be as high as 145%, but they would not be zero”.
President Trump rejected market expectations that seeks to dismiss Jerome Powell for not lowering interest rates. “The press echoes things. No, I have no intention of saying goodbye. I would like to see it a little more active in terms of your idea of lowering interest rates, “ Trump said.
Daily summary of market movements: EUR/USD is expected
- The downward movement in the EUR/USD observed during the first European session is also driven by the low performance of the euro (EUR) due to the weakness in internal business activity. The preliminary data of the purchasing managers index (PMI) of the Hamburg Commercial Bank (HCOB) for April have shown that business activity in general has barely managed to remain in expansion territory.
- The compound PMI has reached lower than 50.1 compared to estimates of 50.3 and the reading of March 50.9. A figure below the 50.0 threshold is considered a contraction in private sector activity. A strong slowdown in the general data of the PMI came from an unexpected drop in the activity of the services sector.
- The PMI of Services fell to 49.7, while it was expected to grow at a moderate pace up to 50.5 from the previous publication of 51.0. Meanwhile, activities in the manufacturing sector continued to contract, but at a slower pace than expected. The manufacturing PMI stood at 48.7, higher than estimates of 47.5 and the previous publication of 48.6.
- Commenting on the preliminary data of the PMI, Dr. Cyrus of the blonde, chief economist of the HCOB, warned that the weak trend in the services sector could continue since “the new business has seen a faster fall.” However, De la blonde was confident that “a greater fiscal expense in infrastructure in Germany and defense spending throughout Europe should eventually benefit not only manufacturing, but also to the services sector, although with a little delay.”
- Meanwhile, the expectations that the European Central Bank (ECB) could cut interest rates again at the June policy meeting are also adding weakness to the shared currency. The operators have become increasingly confident that the ECB could cut interest rates again in June, since officials, including President Christine Lagarde, are sure that inflation will soon return to the goal of 2% of the Central Bank.
- Christine Lagarde expressed confidence in an interview with CNBC on Tuesday that the “uninflationary path is clearly underway”, adding that inflation could be around 2.1% by the end of the year. Lagarde abstained to guide the path of monetary policy. “Or we cut or pause, but we will be extremely dependent on the data,” said Lagarde.
Technical analysis: EUR/USD falls below 1,1400
EUR/USD briefly fell below 1,1400 on Wednesday after facing sales pressure above 1,1500 on Tuesday and recovered later. The main currency pair had shown a strong rebound in recent weeks after a break above September 25, 1,1215. The 20 -week exponential (EMA) mobile average about 1,0840 suggests a strong upward trend.
The 14 -week relative force (RSI) index rises to overstrobra levels above 70.00, indicating a strong bullish impulse but also indicates an increase in the possibilities of a correction.
Looking up, the round level of 1,1600 will be the main resistance for the torque. On the contrary, the maximum of July 2023 of 1,1276 will be a key support for the euros of the euro.
Euro Faqs
The euro is the currency of the 19 countries of the European Union that belong to the Eurozone. It is the second most negotiated currency in the world, behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily business volume of more than 2.2 billion dollars a day. The EUR/USD is the most negotiated currency pair in the world, with an estimate of 30 %of all transactions, followed by the EUR/JPY (4 %), the EUR/GBP (3 %) and the EUR/AU (2 %).
The European Central Bank (ECB), based in Frankfurt (Germany), is the Eurozone reserve bank. The ECB establishes interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means controlling inflation or stimulating growth. Its main tool is the rise or decrease in interest rates. Relatively high interest rates (or the expectation of higher types) usually benefit the euro and vice versa. The GOVERNMENT BOOK of the ECB makes decisions about monetary policy in meetings that are held eight times a year. The decisions are made by the directors of the National Banks of the Eurozone and six permanent members, including the president of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the harmonized consumer prices index (IPCA), are an important economic indicator for the euro. If inflation increases more than expected, especially if it exceeds 2% of the ECB, it forces the ECB to rise interest rates to control it again. Relatively high interest rates compared to their counterparts usually benefit the euro, since they make the region more attractive as a place for global investors to deposit their money.
Published data measure the health of the economy and can have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer trust surveys can influence the direction of the single currency. A strong economy is good for the euro. Not only attracts more foreign investment, but it can encourage the ECB to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the euro is likely to fall. The economic data of the four largest economies in the euro zone (Germany, France, Italy and Spain) are especially significant, since they represent 75% of the economy of the euro area.
Another important fact that is published on the euro is the commercial balance. This indicator measures the difference between what a country earns with its exports and what you spend on imports during a given period. If a country produces highly demanded export products, its currency will gain value simply by the additional demand created by foreign buyers seeking to buy those goods. Therefore, a positive net trade balance strengthens a currency and vice versa in the case of a negative balance
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.