EUR/USD: Euro Takes a Beating to $1.0450 After Trump Floats 25% Tariffs on EU Goods

US President wasn’t too detail-oriented. Instead, he said levies will apply “generally” to EU goods.

❗ EU Formed to “Screw US”

• The EURUSD pair took a turn south Thursday morning with the exchange rate hovering near $1.0450 to $1.0470. Traders are still unsure what to make of what was said yesterday — Donald Trump slammed the European Union, saying it was formed to “screw the US” and vowed to slap the bloc with 25% tariffs.
• The comments by the US President were made during the first cabinet meeting of Trump’s second term. (That’s also when a Reuters photographer caught Donald Trump texting on his phone while Elon Musk was standing up and giving a speech. Later that day, Reuters was banned from reporting on the White House.)

📉 Euro Turns Lower at 100-Day MA

• In this light, the euro lost its balance as the uncertainty going forward was a bit too much for forex speculators. Prior to the drop, the old continent’s currency was floating comfortably above $1.05 with a Wednesday session high of $1.0530 (just under the 100-day moving average).
• The US dollar got a boost across the forex board with the USDJPY pair gaining for a second straight day today to reach 149.40. The GBPUSD pulled back from a three-month high around $1.27.

🤑 Fed’s Inflation Metric due Friday

• Besides Trump’s moves on tariffs and White House decisions, traders will be looking to some scheduled economic reports for guidance on the forex market. On Friday, the US will release the Federal Reserve’s preferred inflation measure — core personal consumption expenditures index.
• The metric is expected to show price pressures cooled to their slowest clip since June but central bankers are on high alert as they watch how Trump’s policies unfold and whether they spark inflation pressures.