Single Currency Boosted By Trump’s Intention To Impose Tariffs

Forex News

The single currency is buoyed by the news that Donald Trump wants to impose 25% import tariffs on steel and 10% tariffs on aluminum. The market reacted negatively as such steel and aluminum companies like Boeing and Ford Motors felt a serious threat. The move is expected to hurt even other sectors and ruin trade relationship with US closest partners. Euro/Dollar rose 0.07% to trade at 1.2276. German retail sales reduced 0.7%. It was the 3rd drop since November. Today, the Eurozone feature Purchasing Price Index and US presents UoM Consumer Sentiment report.

Eurozone inflation pulled back from 1.3% in January to 1.2% in February. Economic growth, on the other hand, keeps demonstrating signs of improvement. The majority speculates about a rate hike from the European Central Bank. The President Mario Draghi will address the situation next week but the Bank is much likely to stand pat. Meanwhile, economists project that Eurozone Gross Domestic Product will be around 2.3% in 2018 and 2.0% in 2019. Inflation should indicate some 1.5% in 2018 and 1.6% in 2019, still under ECB objective. Ending of the asset purchase program is expected to be announced at or before June and no rate hikes will be executed for a long time after the announcement.