The EUR/USD surged to a new five-year high of 1.2082 on Tuesday following comments from US President Donald Trump, who indicated that he does not believe the Dollar has depreciated excessively. This sentiment led to a sell-off of the Greenback, which has declined by more than 1.31% for the day. Currently, the pair is trading at 1.2037, reflecting an increase of over 1.30%.
EUR/USD experiences a notable increase of more than 1.3% following Trump’s indication of ease regarding the weakness of the Dollar. DXY declines to approach four-year lows as tariffs on South Korea revive the “sell America” trade. ECB officials maintain a consistent approach, emphasizing policy stability as the Euro gains momentum.
>The Euro surges as Trump’s remarks pave the way for intensified Dollar selling in light of escalating trade-war concerns: Trump expressed a lack of concern regarding the US Dollar, stating, “The Dollar is seeking its own level, which is fair.” He noted that the Dollar could experience fluctuations, “up or down like a yo-yo.” This served as a positive signal for traders, in light of Trump’s tariff threats directed at South Korea due to the nation’s inability to ratify the trading agreement. The White House has declared a 25% tariff on goods imported from Korea. The US Dollar Index, which gauges the dollar’s performance against six counterparts, has declined by 1.30% to 95.79, remaining slightly above the four-year low triggered by Trump’s comments. The latest economic data from the US indicates a decline in Consumer Confidence, as reported. Previously, the ADP Employment Change 4-week average indicated a decline in strength relative to the previous reading, decreasing from 8,000 to 7,750. In Europe, the European Central Bank policymakers have made headlines. Joachim Nagel of the Bundesbank stated that there is no compelling rationale for adjusting rates in either direction. Martin Kocher of the ECB. ECB’s Nagel indicated that there is no justification for altering rates in the near term and concurs with Chief Economist Lane that there is no compelling case for adjusting rates in either direction. Kocher from the ECB stated that officials should be prepared to take action if necessary.
Latest FX Rate Trends: The Euro experiences an uptick following comments made by Trump
- The US Consumer Confidence has dropped to its lowest point since 2014, as the Conference Board index fell to 84.5 in January, down from a revised 94.2 in December.
- Dana M. Peterson indicated that confidence “collapsed” in January, as concerns regarding both current conditions and future prospects heightened. She observed that all five components of the index experienced a decline, pulling confidence down to its lowest level since May 2014.
- On Wednesday, it is anticipated that the Federal Reserve will maintain the current interest rates. Markets will be intently watching the press conference led by Fed Chair Jerome Powell, especially for any remarks that touch on issues related to the independence of the central bank.
- Speculation regarding a possible coordinated intervention by Japanese and US authorities to bolster the Yen has put pressure on the US Dollar. This follows the Yen’s exchange rate assessment by the Federal Reserve Bank of New York in collaboration with financial institutions.
- According to Prime Market Terminal data, traders anticipate a reduction of 44 basis points by the Federal Reserve as the year concludes.