- Eur/USD takes a dip until 1.1296 after announcing Trump’s tariff on the European Union importing starting on 1 June.
- The pair rebounds by 1.1350 as the US dollars pressurize to increase the concerns of fiscal deficit.
- The Euro spoke of cutting ECB rate, supported by improving German GDP figures.
EUR/USD US President Donald Trump recovered during the Middle-North US session on Friday after being diverted from 1.1300 after inciting the markets by threatening to impose 50% tariffs on the European Union (EU). At the time of writing, the pair recovered and climbed by about 1.1350
US President Donald Trump posted on his social network on Friday that the discussion with the European Union “is not going anywhere! Therefore, I am directly recommending a 50% tariff on the European Union starting from June 1, 2025,” he wrote. The comment fell to the comment before the UPTREND resumes again.
Following those comments, American Treasury Secretary Scott Besent said “the European Union proposals are not of good quality,” saying that “most countries are interacting in good faith, except the European Union.”
Greenback lives on the back foot, weighed with the approval of Trump’s tax bill in the House of Representatives, which is on its way to the Senate. If passed, the proposal will add close to $ 4 trillion to the US debt range in a decade, according to the Congress Budget Office (CBO).
It is worth noting that the US dollar is unaware for the Federal Reserve (Fed) speakers, who have so far said that the US Treasury market is working systematically, the supply chains, inventory and inflation keeps the business authorities unknown to the future by adding uncertainty about inventory and inflation.
American Economic Docket In May, the US housing data depicted, which was mixed as a building permit, but the sales of the new house improved in April.
In EurozoneGermany’s gross domestic product (GDP) led to an annual improvement, although it remained in the contraction sector.
Meanwhile, Euro Speculation that speculation European Central Bank (ECB) is expected to reduce interest rates in the upcoming meeting. ECB’s Rehan and Stornaras favored a rate cut in June, later supported a stagnation after that meeting.
EUR/USD Daily Market Movers: Euro “Sale America” liked by trend
- Euro is in favor of overall US dollar weakness. The US Dollar Index (DXY), which tracks the performance of six currencies against the US dollar, was at 99.10 at 0.79%, 99.10 since April 29.
- The “SAIL US” continues with investors selling the trend bond, US equity and US dollars. It was ignited from US President Donald Trump’s “Trade War” and AAA of Moody’s US government loan to AA1.
- The US schedule had building permits, falling from 4% mother in April, which declined from 1.481 million to 1.422 million, indicating a recession in future building activity.
- According to the US Census Bureau, the mother of 10.9% increased from 0.67 million to 0.743 million in new house sales. This reflects a strong demand in the housing market despite a strict supply situation.
- Germany’s economy Q1 grew in 2025, exceeding estimates due to exports and moving the industry. GDP (GDP) improved from 0.2% to 0.4% QOQ.
EUR/USD Technical approach: set to challenge 1.1400 in near period
The EUR/USD uptrend resumed on Friday, with the pair to a two -week high of 1.1375 as the traders braced to challenge 1.1400. Buyers are collecting steam due to the highest high and low registered during the last five days, and further confirmed by the relative strength index (RSI), which is the trend before the overboard proceeds.
If EUR/USD cleans 1.1400, it will pave the way for testing major resistance levels like 1.1450, followed by 1.1500 marks and year-on-year (YTD) high at 1.1573.
Conversely, if EUR/USD falls below 1.1300, the pair may test the lower level of May 22 of 1.1255, which is ahead of 1.1200.
ECB FAQ
Frankfurt is the Reserve Bank for European Central Bank (ECB), Eurozone in Germany. The ECB determines interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain value stability, which means putting inflation at about 2%. To achieve this, its primary tool is to increase or reduce interest rates. The relatively high interest rate will usually result in a strong euro and vice versa. The ECB Governing Council takes the monetary policy decision in the meetings held eight times a year. Decisions are made by Eurozone national banks and heads of six permanent members, including ECB President, Christine Lagard.
In extreme conditions, the European Central Bank can implement a policy equipment with quantitatively. Qui is the process by which ECB prints the euro and usually uses them to buy government or corporate bonds – from banks and other financial institutions. Qi usually results in a weak euro. Qi is one of the last measures when reducing only interest rates is unlikely to achieve the objective of price stability. ECB used it during the great financial crisis in 2009-11, in 2015 when inflation was forced to force, as well as during the Kovid epidemic.
Quantitative tightening (QT) is the opposite of Qi. This is done after Qi when an economic reform is going on and inflation starts increasing. While in QE, the European Central Bank (ECB) buys government and corporate bonds from financial institutions, to provide them liquidity, ECB stops buying more bonds in QT, and already stops establishing principal maturity on those bonds. It is usually positive (or speed) for the euro.
