- EUR/USD has extended its falls for the second consecutive day as the dollar flows resume.
- The US inflation and feeling data will dominate the economic calendar this week.
- Markets bet on Fed feat cuts, but inflation risks remain complicated.
On Monday, the EUR/USD fell again, marking a second consecutive day of falls for the Fiber and pushing offers towards the level of 1,0900. After a short break, the US dollar has regained control of risk aversion flows, with a weakening of the feeling of investors that even more strengthens the dollar in general.
The new tariff threats restrict the appetite for risk
After a tense week during which the US fully adopted a protectionist commercial policy, despite lacking the necessary industrial infrastructure, import tariffs have been established. USA now applies an import tax of 10% on all assets of all countries, together with “reciprocal” variables calculated by dividing US imports by exports. After a 34% tariff was imposed on Chinese products, China responded with its own 34% tariff to all goods imported from the US unable to find alternative solutions, The Trump administration has threatened to impose an additional 50% tariff Above all Chinese goods, which is scheduled to enter into force on April 8.
Forex today: Trump tariffs continue at the Center for Care before the US CPI.
This week, US data is again the center of attention, with the inflation figures of the consumer price index (CPI) scheduled for publication on Thursday. On Friday, we can expect the inflation numbers of the production price index (IPP) and the results of the consumer’s feeling index of the University of Michigan (UOM). These will serve as the latest key inflation and feeling indicators of the US period prior to tariffs of 2025, offering an important measurement reference point for the remaining months of the year.
According to the CME Fedwatch tool, investors are increasing their bets that the Federal Reserve (FED) will begin to cut interest rates to mitigate recession risks. The markets are discounting almost 200 basic points of rates reductions during the rest of 2025, even when the Fed issues cautious policy statements that indicate that commercial uncertainty complicates any possible rate cuts.
EUR/USD price forecast
The EUR/USD briefly rose to maximum of several months above 1,1100 after the US dollar suffered a fall due to the new US tariff strategy of the USA.
EUR/USD daily graphics
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.
