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Euro Eases After Trump Threatens 30% Tariffs on EU

The euro slipped on Monday after former U.S. President Donald Trump issued a fresh warning to the European Union, threatening to impose tariffs of up to 30% on European imports. The remarks have reignited fears of a transatlantic trade dispute, putting downward pressure on the single currency.

The euro fell 0.4% against the U.S. dollar to trade near 1.0850, as forex traders reacted swiftly to the potential economic implications of renewed tariff policies. Trump’s comments, made during a campaign rally, suggested that if elected, he would take a tougher stance on EU trade, particularly targeting automobiles and agricultural products.  Reuters

Market Reacts to Potential Trade War Fallout

Currency markets are now factoring in the broader implications of a possible escalation in trade tensions between two of the world’s largest economic blocs. A 30% tariff on EU goods could disrupt export volumes, strain business confidence, and weigh on the eurozone’s already fragile growth outlook.

“Tariff threats tend to rattle market sentiment, and this time is no different,” said a senior FX strategist. “The euro is under pressure as investors move toward safer assets like the U.S. dollar amid growing uncertainty.” The Economic Times

The tariff talk comes at a delicate time for the eurozone economy, which is grappling with weak industrial output, sluggish consumer demand, and lingering inflation concerns. Any additional external pressure from U.S. trade policy could further complicate the region’s recovery efforts.

Investors Turn Cautious Ahead of Economic Data

With political risk on the rise, investors are also turning their attention to key economic data from both Europe and the U.S. this week, including eurozone inflation and U.S. retail sales. These figures will likely influence central bank outlooks and guide further movement in the currency markets. Kontan

Until then, the euro is expected to remain sensitive to political developments and trade-related headlines. Should the tariff threat materialize, analysts warn of a prolonged bearish trend for the EUR/USD pair.

As global markets brace for more clarity, the euro’s weakness underscores growing investor caution amid renewed geopolitical and economic headwinds.

 

 

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