- EUR/USD bounces back to near 1.1040 as the US Dollar gives up gains, assuming that Trump’s tariffs will lead to US stagflation.
- US NFP data came in at 228K, beating estimates of 135K.
- Investors expect the ECB to cut interest rates again in April.
EUR/USD recovers a majority of intraday losses and rebounds to near 1.1040 during North American trading hours on Friday. The major currency pair rebounds as the US Dollar (USD) gives up the recovery move seen earlier in the day. The outlook of the US Dollar (USD) remains weak as reciprocal tariffs announced by President Donald Trump are expected to weigh heavily on the outlook of the United States (US) economy.
The imposition of harsh-than-expected reciprocal tariffs by Donald Trump has led to market experts becoming pessimists on global economic growth, including in the US.
Market participants expect that the implementation of full-scale tariffs will stoke inflation and weigh on US economic growth. Such a scenario will lead to stagflation in the economy, making the Federal Reserve‘s (Fed) job more complicated.
On Wednesday, a 10% baseline levy on all imports into the US was announced, which will become effective on Saturday. Additionally, Trump slapped different tariffs for each country, ranging from 10% to 49%.
To get fresh cues on Trump’s tariffs’ impact on the economy, investors will pay close attention to Fed Chair Jerome Powell’s speech, which is scheduled at 15:25 GMT. Investors would like to know how Trump’s tariffs will shape the monetary policy outlook this year.
Daily digest market movers: EUR/USD recovers significant intraday losses
- EUR/USD is expected to stay on the frontfoot even though the US Nonfarm Payrolls (NFP) data for March has come in better than expected. The NFP report showed that the economy added 228K fresh workers, significantly higher than estimates of 135K and the former reading of 117K, downwardly revised from 151K. The Unemployment Rate accelerated to 4.2% against estimates and the prior release of 4.1%. Average Hourly Earnings, a key measure of wage growth, rose moderately by 3.8% year-on-year compared to expectations of 3.9% and the former reading of 4%.
- Theoritically, significant addition of employment adds to market expectations that the Fed will maintain a restrictive monetary policy stance. However, the impact is expected to remain limited as investors are more concerned about potential inflation risks.
- According to the CME FedWatch tool, traders have become increasingly confident that the central bank could cut interest rates in the June policy meeting after President Trump announced the reciprocal tariffs. The Fed’s probability of keeping interest rates in their current range of 4.25%-4.50% has also diminished to 65.8% from 81.5% recorded a week ago.
- Meanwhile, the Euro (EUR) declines as investors expect Trump’s tariffs would weaken the Eurozone economic growth. Investors worry about a potential trade war between the Eurozone and the US over Trump’s sweeping reciprocal tariffs. European Commission (EC) President Ursula von der Leyen stated that the consequences will be “dire for millions of people around the globe”. Von der Leyen warned that the Eurozone is prepared to retaliate with countermeasures if negotiations with Washington fail.
- Additionally, firm expectations that the European Central Bank (ECB) will cut interest rates in April have also put some pressure on the Euro. ECB officials expect that Trump’s tariffs-driven inflation won’t be persistent in nature. Hence, it is not a major obstacle to further easing the monetary policy.
Euro PRICE Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.25% | 0.71% | -0.51% | 0.93% | 3.51% | 2.73% | -0.87% | |
| EUR | -0.25% | 0.50% | -0.71% | 0.73% | 3.28% | 2.52% | -1.08% | |
| GBP | -0.71% | -0.50% | -1.19% | 0.23% | 2.78% | 2.01% | -1.57% | |
| JPY | 0.51% | 0.71% | 1.19% | 1.41% | 3.98% | 3.14% | -0.40% | |
| CAD | -0.93% | -0.73% | -0.23% | -1.41% | 2.49% | 1.73% | -1.79% | |
| AUD | -3.51% | -3.28% | -2.78% | -3.98% | -2.49% | -0.75% | -4.23% | |
| NZD | -2.73% | -2.52% | -2.01% | -3.14% | -1.73% | 0.75% | -3.51% | |
| CHF | 0.87% | 1.08% | 1.57% | 0.40% | 1.79% | 4.23% | 3.51% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Technical Analysis: EUR/USD manages to rebound above 1.1000
EUR/USD recovers majority of intraday losses and bounces back to near 1.1040 on Friday. The major currency pair strives to reclaim Thursday’s high of 1.1147, which came after a decisive breakout above the prior resistance of 1.0955, which is March’s highest level. The near-term outlook of the major currency pair remains bullish as the 20-day Exponential Moving Average (EMA) resumes its upward journey, trading around 1.0820.
The 14-day Relative Strength Index (RSI) holds above 60.00, indicating an active bullish momentum.
Looking down, the prior resistance at 1.0955 and the March 31 high of 1.0850 will act as major support zones for the pair. Conversely, the September 25 high of 1.1214 will be the key barrier for the Euro bulls.
