- EUR/USD softens to near 1.0465 in Thursday’s Asian trading hours, down 0.20% on the day.
- Trump vowed to slap 25% tariffs on the EU, weighing on the Euro.
- Traders are once again pricing in two quarter-point interest rate reductions by the Fed.
The EUR/USD pair loses ground to around 1.0465 during the Asian trading hours on Thursday. The Euro (EUR) weakens after US President Donald Trump threatened to slap 25% tariffs on the European Union. Investors await the release of the estimate of US Gross Domestic Product (GDP) for the fourth quarter (Q4) and the weekly Initial Jobless Claims for fresh impetus, which are due later on Thursday.
Late Wednesday, US President Donald Trump reiterated his insistence on 25% tariffs on Canada and Mexico, as well as adding the European Union (EU) to the list of countries from which he will penalize US consumers for importing. The EU vowed to respond “firmly and immediately” to “unjustified” trade barriers, indicating that it stands ready to retaliate swiftly against new levies. Trump’s tariff threats could worsen the Eurozone’s economic slowdown and might drag the shared currency lower against the US Dollar (USD).
Across the pond, the concern about US economic growth has bolstered expectations the US Federal Reserve (Fed) will deliver at least two rate cuts this year, undermining the Greenback. The markets are now pricing about 58 basis points (bps) of easing for 2025, although rates are expected to remain on hold for the next several months, according to the CME FedWatch tool.
