- The EUR/USD exchange rate edges lower, hovering around 1.1380 in the initial hours of Friday’s Asian trading session.
- Following Beijing’s denial, President Trump indicated that the U.S. is engaged in trade discussions with China.
- Market participants are increasingly anticipating that the European Central Bank will reduce interest rates at its June policy meeting.
The EUR/USD currency pair declines to approximately 1.1380 in early Asian trading on Friday. Nevertheless, further declines for this major pair could be constrained as market participants continue to monitor U.S.-China trade relations. Later today, the final University of Michigan Consumer Sentiment Index will be published.
Late Thursday, U.S. President Donald Trump stated that his administration is in communication with China regarding trade matters. Concurrently, China communicated that no economic and trade negotiations have taken place, and it pressed the U.S. to remove all unilateral tariffs if it genuinely desires a resolution. Ongoing anxieties regarding potential tariff impositions by President Trump and sustained trade tensions are expected to exert downward pressure on the U.S. Dollar, thereby supporting EUR/USD in the short term.
“The disparity in perspectives on trade between the U.S. and China appears vast,” commented Matt Weller, head of market research at StoneX. “As long as this divergence persists, any upward movements in the dollar may be fleeting.”
