EUR/USD Struggles at 1.0400 Level Amid Trump’s Tariffs and ECB Easing Prospects

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The EUR/USD pair experiences mild losses around 1.0410 during Thursday's Asian session. The Euro (EUR) weakens as US President Trump threatens to impose tariffs on the Eurozone. The European Commission is set to release its advanced Consumer Confidence report for January. On the US side, weekly Initial Jobless Claims data will be published.

Trump stated on Tuesday that his administration is considering 25% tariffs on Canada, Mexico, China, and the European Union. Concerns over an economic slowdown in the Eurozone and the uncertainty surrounding Trump's tariff threats could weigh on the Euro in the short term.

Analysts also predict that Trump's tariff measures may lead to inflationary pressures, which could prompt the US Federal Reserve (Fed) to reduce rates only once this year. This would likely strengthen the US Dollar (USD), acting as a headwind for EUR/USD.

Meanwhile, the European Central Bank (ECB) is expected to implement 25 basis point (bps) rate cuts in its next four meetings. ECB President Christine Lagarde, along with policymakers Francois Villeroy de Galhau, Klaas Knot, and Yannis Stournaras, have all expressed support for further easing. This dovish stance from the ECB is likely to put additional pressure on the Euro against the Greenback.

 

 

 

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