The EUR/USD pair experienced upward momentum, reaching approximately 1.1065 during the early European trading session. This movement coincides with the implementation of new reciprocal tariffs initiated by the previous US administration. The US Dollar (USD) weakened against the Euro (EUR) following the enactment of these tariffs, which have heightened concerns regarding potential recessionary pressures.
Market participants are anticipating the release of the Federal Open Market Committee (FOMC) Minutes for further insights into monetary policy. Additionally, Federal Reserve (Fed) official Thomas Barkin is scheduled to deliver a speech.
The imposition of tariffs on imports from numerous countries, with increases ranging from 11% to 84%, has contributed to global trade tensions and recessionary fears, exerting downward pressure on the USD and providing support for the EUR/USD.
Conversely, expectations of forthcoming interest rate reductions by the European Central Bank (ECB) in April and June, driven by concerns that the tariffs could induce a recession in the Eurozone, may limit the Euro’s (EUR) appreciation. Current market pricing indicates a nearly 90% probability of a 25-basis-point rate cut at the ECB’s upcoming policy meeting on April 17.
