The EUR/USD pair is struggling to capitalize on its recent gains, oscillating within a narrow range below 1.0500 in European trading this Monday. This subdued movement comes as the US Dollar exhibits weakness following last Friday’s disappointing US Retail Sales data. Similarly, the GBP/USD pair maintains its range near 1.2600 during the early European session, indicating a lack of significant momentum in currency markets.
Trading activity is expected to remain thin as US markets are closed for Presidents' Day. This national holiday contributes to the muted market environment, with many traders opting to stay on the sidelines. Meanwhile, economic policies under the Trump administration are starting to take shape, with President Trump announcing new tariffs on some of America’s trading partners.
The imposition of these tariffs signals a shift in trade dynamics, potentially leading to more levies in the coming quarters. This move has sparked expectations of foreign retaliation, which could add further complexity to international trade relations. Despite these developments, the mood in currency markets remains upbeat, as the weakness of the US Dollar acts as a cushion against downside pressures for currency pairs like EUR/USD.
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