EUR/USD falls below 1.0400 amid Trump's tariff threats | 07 Enero 2025

Event to pay attention to today:

17:00 EET. USD - ISM Services PMI

EURUSD:

EUR/USD is down to 1.0380 during Asian trading hours on Tuesday. The US dollar rose after President-elect Donald Trump said that his tariff policy will not be cut. Traders are awaiting preliminary data on the euro zone's harmonised consumer price index (HICP) and the US services purchasing managers' index (PMI) from ISM for December, due out later on Tuesday.

Trump denied a Washington Post report that his aides are considering narrowing the tariff plan to apply only to a limited number of critical imports. Traders will be closely watching developments around Trump's tariff plan. Analysts believe that if the US tariffs are generally lower than Trump promised during the election campaign and only target ‘critical’ sectors, the outlook for global growth should improve and the US dollar should weaken

Overseas, stronger-than-expected PMI data from Spain, Italy, France, Germany and the Eurozone could help limit euro losses. In addition, the initial German consumer price index, which came in above forecasts in December, provides some support for the Euro as markets reduce bets on European Central Bank (ECB) policy easing. However, political instability in Europe and the threat of a trade war with the United States could depress the euro against the dollar.

Trade recommendation: Watch the level of 1.0420, when fixing above consider Buy positions, when rebounding consider Sell positions.

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