Key points:
- Euro rises in powerful swing
- Dollar dented by tariff jitters
- China and US battle it out
Mosaic of factors propelled the euro, including lowering inflation and growth concerns for the US economy. Trade wars are still very much on.
🔥 Euro Hits 3-Year High
- The
EURUSD pair hit a fresh three-year high after traders ramped up their bets on the euro and sold off the US dollar in efforts to position for a clouded growth outlook. The European currency shot up by 4% from Thursday’s low to Friday’s session high, gobbling a whopping 450 pips from $1.0940 to just under $1.14 (every long forex bro’s dream, right?). - That’s the highest level since early 2022. Forex traders are increasingly wary of holding the US dollar amid all the tariff tantrum that’s going on between the US and China. Not even a 90-day pause for most other countries could fix sentiment.
📞 Tariffs On, Tariffs Off
- Donald Trump’s flip-flopping and back-and-forth tariff stance is denting the confidence in the greenback. The US dollar index, which tracks the US currency’s valuation against six major rivals, cracked 100.00 to hit a low of 99.70 — the lowest since mid-2023. Inflation data released Thursday gave traders another reason to dump the buck.
- Consumer prices in March rose 2.4%, way below the 2.8% expected by analysts. That was bad news for the dollar because it suggested the Federal Reserve might lean toward an interest rate cut sooner rather than later. (Yes, despite the tariff drama.)
🤔 Euro Slides, China Still a Target
- Back to the tariff kerfuffle — markets aren’t too optimistic about Trump’s standoff with Beijing. And while he backed down on most other tariffs, China is staring at a mind-melting 145% tariff rate. Unless a deal is reached that would ease the pressure, the US dollar is bound to stay volatile and reactive to all major headlines.
- As the European session was getting into its stride, the euro gave away some of that flex and slipped under $1.13 to gravitate toward $1.1270.
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