In the European session on Thursday, EUR/USD traded listlessly near 1.0400, reflecting a defensive posture amid US President Donald Trump's discussions on tariffs. Traders observed that as the US dollar stabilized, the foreign exchange pair met with supply pressures. This cautious stance came in the wake of President Trump's renewed threats to impose tariffs on the Eurozone, creating a climate of uncertainty in the markets.
Despite a generally positive risk tone this week, buoyed by the market's initial relief over Trump not announcing new tariffs on China during his inauguration, EUR/USD experienced renewed selling pressure. The pair struggled to maintain ground, hovering around 1.2300 during European trading hours. The European equity markets, however, found some optimism; the Stoxx 600 reached a fresh record high yesterday. This surge was fueled by hopes that any US tariffs on Europe might be softer than initially feared.
The US dollar's rebound yesterday was attributed to higher US growth and potential inflation expectations. This development also saw US equities gain strength, driven by robust earnings reports and Trump's push for advancements in artificial intelligence. Nevertheless, concerns linger regarding rising inflationary pressures stemming from Trump's pro-growth policies.
In other market movements, gold prices (XAU/USD) remained subdued through the first half of the European session on Thursday. At the same time, crude oil prices declined for the sixth consecutive day. This drop was influenced by Trump's policy plans and an unexpected build-up of one million barrels in US inventories last week.
This report has been prepared by Swissquote Bank Ltd purely for informational purposes. It should not be interpreted as an invitation or recommendation to buy or sell any currency or financial instrument. The views expressed in this report are subject to change without notice and may differ from or contradict Swissquote Bank Ltd personnel opinions at any given time.