The EUR/USD pair has appreciated to approximately 1.0950 during the early European trading session, reflecting a 0.85% increase. This movement follows the announcement by former President Trump of a potential 20% tariff on goods from the European Union. Market participants are currently awaiting the release of the US March ISM Services PMI report for further market direction.
The Euro has strengthened against the US Dollar in response to the proposed tariffs, which are scheduled to take effect on April 9th. European Commission President Ursula von der Leyen has criticized the tariffs and pledged retaliatory measures. Concerns regarding the potential ramifications of an escalating global trade conflict, coupled with recent weaker-than-anticipated US economic data, have heightened anxieties about a possible deceleration in global economic growth, thereby exerting downward pressure on the US Dollar.
Federal Reserve Governor Adriana Kugler indicated on Wednesday that increased tariffs could contribute to a more protracted period of inflation than initially projected. Kugler expressed support for maintaining the current interest rate, contingent upon the persistence of these inflationary risks.
Traders are also anticipating the release of US weekly Initial Jobless Claims, the final S&P Global Services PMI, and the ISM Services PMI. Positive outcomes from these reports could bolster the US Dollar and provide support for the EUR/USD pair.
[Euro FAQs section removed as it is background information and not directly related to the news event.]
