The EUR/USD pair rose to around 1.0950 during the early Asian session on Thursday, with the U.S. Dollar weakening against the Euro after U.S. President Donald Trump revealed plans for more aggressive tariffs against U.S. trading partners.
Trump announced a 20% tariff on European Union (EU) goods and higher duties on other major trading partners, set to take effect on April 9. The move sparked immediate backlash, with European Commission President Ursula von der Leyen criticizing the tariffs and vowing retaliation. Concerns over the potential impact of a growing global trade war, combined with weaker-than-expected U.S. economic data, have raised fears of a sharp global slowdown, which has broadly weakened the USD.
Fed’s Kugler on Inflation Risks
Federal Reserve Governor Adriana Kugler weighed in on the tariff situation, warning that rising tariffs could lead to more prolonged inflationary pressures than initially expected. Kugler expressed support for maintaining the current interest rate, emphasizing the ongoing risks to inflation.
Market Outlook
Traders are now focused on upcoming U.S. economic data, including the weekly Initial Jobless Claims, the final S&P Global Services PMI, and the ISM Services PMI. Should these reports come in stronger than expected, they could boost the USD, providing support for the EUR/USD pair.
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