Statements by Donald Trump depress euro

Posted 19 February, 2019

After staying above $1.13 handle, the euro has started slackening during the Tuesday trading session.

Specifically, the euro posted a jumped up against the greenback on Monday amid slow trading during the stock exchange weekend in the USA. However, trading is getting back to normal pace today, and the euro-to-US dollar exchange rate shows a reasonable trend. The negative impact on the euro as well as support for the American currency is coming from the anxious mood at the exchanges regarding the offensive message of the US President Donald Trump towards Europe and Asia.

Specifically, the American leader was expected to receive the report prepared by the US Department of Commerce covering the issue of whether car and spare parts imports threaten the national security of the country. In the case of the positive determination, Washington would get a reason to launch 20-25% duties on imports of cars and spare parts.

Donald Trump has already expressed his dogmatic positions being a supporter of punishment duties. Meanwhile, in the EU, Chairman of the European Commission Jean Claude Juncker noted that the US President had promised not to launch duties on car imports from Europe in the near term otherwise Europea will take countermeasures in the foreign trading area. Such rhetoric seems to depress euro but bolster the US dollar.

There are no macroeconomics reports to be expected in the USA and euro-area today.

Previous forecast

20 February, 2019 15:40

← Euro getting stronger but long-run upward potential restrained

The euro reportedly restored positions vs the US dollar by Tuesday's end. The currency stands generally firm today with the euro-to-US dollar rate at about $1.1344 in the first half of the day. The greenback was affected by reports about a lower yield of the US state bonds. Moreover, the market also reacted to the message of the US Fed representative, which called economic slowdown and labour market weakening as the most probable scenario for the country. It was also highlighted that the Central Bank could collect all the required data before revising the monetary policy.

Euro getting stronger but long-run upward potential restrained

Next forecast

18 February, 2019 16:38

Short supply reports encourage oil market with prices soaring →

The oil prices finished the previous week at the 3-month peaks, soaring above the $66/bbl handle. In total, the Brent oil quotes gained more than 6.5% over the past week and hit $66.40/bbl for the first time since late November. In the current environment, all the factors speak well for further strengthening of Brent oil. Nevertheless, any negative signs like a return of anti-risk sentiments, can depress already high quotes during the profit taking in the market.

Short supply reports encourage oil market with prices soaring
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