EUR/USD Gains As Market Pressure Eases
EUR/USD surged eight-tenths of a percent higher on Tuesday, regaining lost ground but failing to reclaim the 1.0400 handle. The fiber has snapped a six-day losing streak, but overall bullish momentum remains thin with the euro at the mercy of overall market flows and the looming US Nonfarm Payrolls (NFP) figures.
EUR/USD’s early-week slide towards 1.0200 sparked by US President Donald Trump’s impending tariffs has been strongly recovered after the Trump administration took any excuse it could find to avoid a self-imposed threat to tax its own citizens for importing goods from other countries. The threat of a 10% import tax on European goods remains, but a last-minute change to concessions on nearly all of President Trump’s targeted countries, except China, has convinced investors that the stance is just that and nothing more. A 10% import fee on Chinese goods is still on the table, but President Trump has also failed to follow through on his threat to arbitrarily double tariffs on any country that retaliates.
Of note, China’s retaliatory 10% tariffs on US goods were largely a dramatic gesture; very few US-made goods ever make it to the Chinese market, and the move was largely symbolic. Investors are now largely ignoring the Trump administration’s trade rhetoric as the US muddles through its own arrangements, and future tariff threats are likely to have less impact as future concessions are already priced in.
Source: FXStreet
