The EUR/USD pair climbed above $1.06 late Tuesday and held firm early Wednesday, as the U.S. dollar hit a four-month low following Donald Trump’s first address to Congress in his second term. The euro rallied to $1.0620, its highest level since mid-November, fueled by investor concerns over Trump’s aggressive trade policies.

During his two-hour speech, Trump doubled down on tariffs, tax cuts, and government efficiency, vowing to usher in a “golden age” for the American economy. Despite evidence suggesting that tariffs may harm consumers and slow global growth, Trump dismissed these concerns, saying, “There will be a little disturbance, but we’re okay with that.” He reiterated his commitment to matching foreign tariffs with equal countermeasures to ensure the U.S. remains competitive.

The U.S. dollar weakened, reflecting growing uncertainty about the economic impact of trade wars. Meanwhile, the euro has been steadily climbing as forex traders fear that prolonged tariff disputes could disrupt global markets. Countries like Canada, Mexico, and China have already responded with countermeasures, adding to the tension.

Europe is next in line, as Trump has threatened 25% tariffs on European goods, though no specific timeline has been announced. Traders are closely watching for any concrete moves from the White House, as further tariffs could drive more volatility in the currency market.

For now, the euro’s strength and the dollar’s weakness highlight investor concerns over trade uncertainty, making upcoming U.S.-EU negotiations a critical factor for forex markets in the coming months.