EUR/USD experienced a decline late Wednesday in the North American session, showing losses exceeding 0.30% as US President Donald Trump held back from his threats to impose tariffs on eight European nations amid discussions regarding Greenland.
The EUR/USD pair experiences a decline of more than 0.30% following Trump’s decision to cancel the proposed tariffs associated with Greenland negotiations. Enhanced risk sentiment boosts US equities and strengthens the Dollar, putting pressure on the Euro. Attention shifts to US GDP, Jobless Claims, Core PCE, and ECB policy accounts.
> The Euro experiences a decline as reduced trade tensions between the US and EU strengthen the US Dollar: In Davos, Switzerland, President Donald Trump shared on Truth Social that following a fruitful meeting with NATO Secretary General Mark Rutte, they have established the groundwork for a future agreement concerning Greenland and the broader Arctic Region. He stated, “Based upon this understanding, I will not be imposing the tariffs that were scheduled to go into effect on February 1.” In the latest update, there was an improvement in risk appetite, evidenced by the performance of US equity markets. Three of the four US equity indices concluded Wednesday’s session with gains ranging from 1.16% to 1.21%. The US Dollar regained some strength as indicated by the US Dollar Index. The DXY, which monitors the dollar’s value against six currencies, has increased by 0.20% to reach 98.75. Recent information indicated that the US Supreme Court showed doubt regarding Trump’s power to dismiss Fed Governor Lisa Cook. In the Eurozone, recent developments included speeches from European Central Bank officials, prominently featuring President Christine Lagarde and Kocher. On Thursday, the economic calendar will include the final reading of the US Q3 2025 Gross Domestic Product, jobless claims, and the Federal Reserve’s favored inflation measure, the Core Personal Consumption Expenditures Price Index. The upcoming schedule in the European Union includes the ECB’s Monetary Policy Meeting Accounts along with the Consumer Confidence data for the EU.
Latest FX Rate Trends: The Euro faces pressure as the Trump TACO trade resurfaces.
- The meeting between US President Donald Trump and NATO Secretary General Mark Rutte established a foundation for a prospective agreement concerning Greenland. Trump described the framework as “fantastic,” yet provided no specifics.
- A poll indicates that more than 100 economists anticipate the Fed will maintain current rates in January. The prevailing sentiment indicates that most anticipate the US central bank will maintain its current stance until the conclusion of Fed Chair Jerome Powell’s term in May.
- In December, US Pending Home Sales experienced a significant decline of 9.3%, representing the lowest level recorded since July. The analysis indicated that the supply of existing homes is limited, with numerous homeowners secured at mortgage rates under 5%, which diminishes their motivation to sell and impacts transaction volumes.
- Reports indicate that the European Union is postponing the ratification of the US-EU trade agreement.
- ECB Kocher indicated that employing trade policy threats to apply political pressure heightens the risks for the global economy. ECB’s Lagarde indicated that monetary policy “is in a good place” and noted that the bloc’s economy would be more robust if not for tariffs.