EUR/USD: Euro Consolidates Near $1.08 as Traders Await Key Tariff Update

European currency was tight lipped over any potential direction as its counterpart, Mr. Buck, was waiting for the US President’s update.

🤝 Euro Steady Near $1.08

• The EURUSD pair was treading water early Wednesday with traders kicking off the day in a muted fashion. The euro was floating pretty much flat just under $1.08, looking to log its third straight day of declines, as forex markets were braced for impact from Donald Trump’s long-awaited announcement.
• It’s Tariffs Day! Today is the day when the whole world gets to find out what it should be paying for imports into the US. Over the weekend, Trump said tariffs will apply to “all countries” with no exemptions.

📣 Markets Queue Up for Tariff Update

• Still, there’s some hope that these reciprocal tariffs could be softer than expected. If they turn out to be better than what analysts had been pricing in, the US dollar might get a reprieve and move higher across the board. But if they don’t, traders might move away from it in pursuit of rival currencies with brighter outlook.
• Speaking of outlook, the euro’s technical parameters are painting an optimistic picture. All three major moving averages — 50-day, 100-day, 200-day — are now below the exchange rate with the 200-day moving average sitting at $1.0730.

🧐 Greenback in Wait-and-See Mode

• As to the US dollar, the American currency should typically strengthen in international markets if tariffs take effect. The nature of the tariffs is that they tend to make the local currency more competitive due to the added cost on imports. But tariffs could also propel inflation higher and that’s not something the Fed wants to see.
• The Federal Reserve spent a few good years trying to stamp out stubborn inflation and it would be pretty disappointing to Fed boss Jay Powell to see all that progress reverse. Not to mention souring consumer sentiment and dented corporate profits.