The EUR/USD pair saw gains, reaching near 1.0780 during the Asian trading session on Wednesday. The US Dollar (USD) weakened against the Euro (EUR) following disappointing US economic data and growing uncertainty around US President Donald Trump’s trade policy ahead of a new round of tariffs set to be announced next week. Market participants are awaiting the release of the US Durable Goods Orders report for February later on Wednesday.
Weak US consumer confidence and concerns about an economic slowdown could further drag the USD lower. Data from the Conference Board on Tuesday revealed that US consumer confidence dropped to its lowest level in more than four years in March, highlighting the strain on households amid growing uncertainty.
US Tariff Uncertainty and Weak Confidence Data Weigh on the Dollar
The uncertainty surrounding Trump’s upcoming trade policy, including reciprocal tariffs set for implementation next week, has added pressure on the USD. Trump indicated late Monday that not all tariffs would take effect on the April 2 deadline, with some countries potentially receiving exemptions, though he did not provide further details. “There’s elevated baseline anxiety in the markets ahead of next week’s trade policy announcement,” said Kyle Rodda, senior financial markets analyst at Capital.
Meanwhile, dovish statements from European Central Bank (ECB) officials are limiting EUR upside potential. ECB Governing Council member François Villeroy de Galhau remarked on Tuesday that there is still room for further interest rate cuts, suggesting that the deposit rate, currently at 2.5%, could fall to 2% by the end of the summer. This outlook may weigh on the EUR in the near term, despite the current strength in the pair.
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