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Euro Surges to $1.09 Despite U.S. Tariffs

Euro Surges to $1.09 Despite U.S. Tariffs

The euro climbed to $1.09 on Thursday, even after President Trump imposed 20% tariffs on all imports from the European Union. The move marked a major escalation in the global trade conflict, triggering concerns over economic growth and weighing on the U.S. dollar.

The euro’s gains were also supported by weakening inflation in the Eurozone. Recent data showed that the inflation rate eased to 2.2% in March, the lowest level since November 2024. Meanwhile, core inflation dropped more than expected to 2.4%, its lowest level since January 2022.

With inflation slowing, investors are betting on rate cuts from the European Central Bank (ECB). Market expectations for ECB rate cuts have strengthened, with some analysts predicting reductions totaling 65 basis points this year to support economic stability.

At the same time, escalating trade tensions between Washington and Brussels are adding further uncertainty to the market. Trump’s tariffs on European goods could lead to potential retaliation from the EU, further complicating the global economic outlook.

Looking ahead, investors will be watching for signals from the ECB’s next policy meeting. Policymakers face a tough decision—balancing lower inflation with the risks posed by trade conflicts and slowing global growth.

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