EUR/USD remains stable near 1.1800 during the early European session on Friday. The European Union has suspended the trade agreement with the United States due to uncertainties surrounding tariffs. Eurozone inflation has decreased to its lowest point since September 2024. The EUR/USD pair is currently trading in a stable manner around the 1.1800 level during the early Asian session on Friday. The pair stabilizes as subdued Eurozone inflation mitigates concerns over US tariff uncertainties. Market participants are looking forward to the preliminary reading of the Consumer Price Index from Germany on Friday for insights into the potential trajectory of future policy easing. The Producer Price Index report is set to be released in the United States.
The ruling by the US Supreme Court invalidated the administration’s extensive application of emergency powers to implement tariffs. The response from US President Donald Trump involved a strong critique of the court, alongside the implementation of a comprehensive 15% tariff on imports. On Wednesday, US Trade Representative Jamieson Greer indicated that Trump intends to increase this rate to 15% for numerous countries in the near future. The scope of this authority is confined to a period of 150 days, unless an extension is granted by Congress.
A swift succession of policy changes may apply selling pressure on the Greenback, potentially providing a favorable environment for the major pair. On Monday, lawmakers in the European Union opted to postpone the endorsement of the trade agreement with the US, citing concerns regarding the unpredictability of Trump’s tariff policy. “We anticipate a detailed explanation from our American counterparts regarding the current situation,” stated European Commission spokesman Olof Gill.
In the Eurozone, inflation decreased to 1.7% in January, reaching its lowest point in 16 months. Core inflation has also decreased to 2.2% year-over-year during the same period. The recent readings have heightened expectations that the European Central Bank might lean towards a more dovish approach, potentially putting pressure on the euro in comparison to the USD.