EUR/USD: Euro Powers Up After Traders Ditch Tariff-Battered Dollar. Exchange Rate Eyes $1.10

Trump’s tariffs didn’t spare the greenback, which slumped to a six-month low against a basket of six rival currencies.

📈 Euro Hits Six-Month High

• The EURUSD pair was pushing higher and higher Thursday morning as European traders woke up to the news of tariffs reverberating across the world. It’s the end of globalization, many headlines were saying, after Donald Trump unveiled a package of offensive tariff measures that threatened to end global trade as we know it.
• Europe is getting slapped with a 20% tariff, China is looking to get another 34% to a total of 54% on its imports into the US. In all, 180 countries have been added to America’s tariff agenda.

📢 Selloffs Across the Board

• It’s a bad day to be the US dollar — the American currency pulled back against a basket of six currencies. The dollar index DXY hit a six-month low of 102.39 this morning. US stocks were getting hammered out there with futures trading showing the S&P 500 in freefall. Apple shares were down bad, too.
• The euro turned out to be a winner in these unfortunate circumstances. The euro-dollar rate climbed as high as $1.0990, hitting a six-month high. Are the euro bulls back with a vengeance?

📚 Tariffs and Dollars

• Tariffs are one of the quickest ways to isolate a country. In their essence, tariffs are stagflationary for global trade and inflationary for the one that imposes them (the US might see consumer prices tick up). Typically, these tariffs should strengthen the local currency, but in this case, the economic risks far outweigh the potential positives.
• The US dollar slipped against the Japanese yen with the USDJPY rate sliding 1.3% to ¥146.80. The sterling advanced 0.9% to hit a six-month high of $1.3130.