EUR/USD: Euro Marches Lower to Float Near $1.13 as Trump’s Tariff Retreat Sparks Dollar Rally
1 min read
Key points:
- Euro-dollar dips near $1.13
- Trump eases on Powell, China
- Euro loses 270 pips in two days
White House administration is weighing axing tariffs on China by half. The news helped the dollar let loose and go wild across the board.
💵 Dollar Roars on Tariff Cut Talk
- The dollar’s back — and the euro’s backing off. The
EURUSD fell near the $1.13 mark on Thursday morning, as news broke a day earlier that the White House is considering slashing tariffs on Chinese goods by half. That surprise pivot sent the US dollar roaring higher across the board and pressured the euro after weeks of steady gains. - The shift in policy — or at least the signal of it — has been read by markets as a potential de-escalation of trade tensions and a return to more predictable macro footing. For currency traders, it also means less need for safe-haven hedges and more appetite for dollar-denominated assets.
🤔 No More Trump vs Powell?
- The move marks a clear reversal from earlier in the week, when Trump’s aggressive tone on trade and repeated jabs at Fed Chair Jay Powell had the dollar on its back foot. Now, with both of those narratives cooling, the greenback is on a full-blown rebound, gaining ground against every major currency — including the euro.
- In a press conference yesterday, Trump said he has “no intention” of firing Jay Powell, even though just last week he posted on his Truth Social account that the Fed chief’s termination “couldn’t come fast enough.”
🔎 Euro’s Pullback Deepens
- Technically, the euro-dollar breaking below $1.13 could open the door for a deeper pullback, especially if follow-through from Washington confirms the tariff rollback. But that’s the White House of Donald Trump who has been flip-flopping around market-moving issues, causing confusion in investors.
- The greenback’s strength has eaten into the euro to the point where the old continent’s currency has lost about 2.3% from its valuation, or 270 pips, in the span of less than three trading sessions. On Tuesday, the euro hit a three-year high of $1.1572.