In the forex market, the EUR/USD pair is trading near the 1.1330 level following its recent reversal. Traders are trimming their short positions on the U.S. Dollar ahead of the release of the U.S. Personal Consumption Expenditures (PCE) Price Index. This shift comes amid rising concerns over former President Trump’s trade policies and the broader fiscal outlook of the United States.
Renewed Pressure on the Dollar After Temporary Tariff Reinstatement
On Thursday, a U.S. federal court overturned a previous decision that had blocked Trump-era tariffs, leading to a sharp drop in the Dollar’s value. However, the Greenback regained some footing on Friday as investors turned their attention to the upcoming PCE inflation data.
Weaker U.S. Spending and German Retail Sales Decline
In the United States, higher-than-expected weekly jobless claims and confirmation of an economic contraction in Q1 have intensified market worries. Meanwhile, an unexpected decline in Germany’s retail sales has added pressure on the Euro, with attention now focused on German CPI data due later today.
If inflation in Germany continues to moderate, this could pave the way for further easing by the European Central Bank (ECB) in June, potentially weighing further on the Euro in the forex market.
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