- The edges of the euro/the dollar decrease to 1,0425 in the late American session on Wednesday.
- FOMC minutes indicated that the Federal Reserve wants to take time before making interest rates.
- The new round of Trump’s introductory threats weighs the euro.
EUR/USD pair weakens approximately 1,0425 during the late American session on Wednesday. The tariff fears of US President Donald Trump and geopolitical tension provide some support to the US dollar (USD). Investors are awaiting the unemployed demands in the United States, the Economic Pioneer and the Philly Fed manufacturing reports, which are scheduled to be later on Thursday.
Minutes of the FOMC meeting, which was released on Wednesday, stated that it is appropriate to maintain the target interest rate unchanged at the January meeting, adding that the Federal Reserve is believed to be in a good position to take time to assess expectations for economic activity, the labor market and inflation. Federal policies have agreed that inflation must show clear signs of slowdown before any other price cuts.
They are scheduled to speak on Thursday (FERED) to speak on Thursday (FERED) to speak on the day of yeast (their observations can make some hints about the path followed by American interest rate The near term.
The latest round of customs tariff threats raises Greenback and creates the opposite winds for EUR/USD. Trump criticized the tariff of European Union cars and threatened mutual definitions in various sectors. Late on Tuesday, Trump said he intends to impose a “25 %” car tariff and similar duties on semiconductors and pharmaceutical imports.
Common questions euro
The euro is the currency of the 19 European Union countries belonging to the eurozone. It is the second most traded currency in the world behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily rotation of more than $ 2.2 trillion per day. EUR/USD is the most trading currency pair in the world, which represents an estimated 30 % of all transactions, followed by EUR/JPY (4 %), EUR/GBP (3 %) and EUR/AUD (2 %).
The European Central Bank (ECB) in Frankfurt, Germany, is the backup bank. The European Central Bank sets interest rates and runs monetary policy. The primary mandate in the European Central Bank is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary performance is to raise or reduce interest rates. Relatively high interest rates – or expect higher rates – usually benefit from the euro and vice versa. The Board of Directors of the European Central Bank is making monetary policy decisions at eight times a year. Decisions are made by the heads of national banks in the eurozone and six permanent members, including the President of the European Central Bank, Christine Lagarde.
The inflation data in the euro area, measured by a coordinated index of consumer prices (HICP), is an important economist for the euro. If inflation increases more than expected, especially if it is 2 % higher than the European Central Bank’s goal, then the European Central Bank is obliged to raise interest rates to return it in control. Relatively high interest rates usually benefit compared to its euro counterparts, as it makes the region more attractive as a place for global investors to stop their money.
Data ejaculates a measurement of economics health and can affect the euro. Indicators such as GDP, manufacturing, PMIS, employment services, and consumer morale surveys can affect the trend of uniform currency. The strong economy is useful for the euro. Not only is to attract more foreign investment, but the European Central Bank may encourage interest rates, which will enhance the euro directly. Otherwise, if economic data is weak, the euro is likely to decrease. Economic data of the four economies in the eurozone (Germany, France, Italy and Spain) are of particular importance, because it represents 75 % of the eurozone economy.
Other important version of the euro is the commercial balance. This indicator measures the difference between what a country gains from its exports and what it spends on imports during a certain period. If a country produces very absolute after exports, its currency will obtain a purely value of the additional demand created from foreign buyers who seek to buy these goods. Therefore, the positive and positive trade balance enhances the currency and vice versa to achieve a negative balance.
