EUR/USD Gains Further After Higher US Jobless Claims
By Sagar Dua
EUR/USD continues its upward trend as the US Dollar weakens, despite ongoing tariff threats from US President Trump. The pair approaches 1.0450, with the US Dollar Index (DXY) falling to near 106.90. This movement occurs even as investors remain cautious due to Trump's trade policies.
Trump's Tariff Impact
President Trump has already imposed significant tariffs on steel, aluminum, and Chinese imports. Further reciprocal tariffs are threatened on automobiles, semiconductors, and pharmaceuticals by April. The President has stated that these measures are designed to allow domestic manufacturers time to increase production capacity.
US Economic Data
Recent US economic data has also influenced the EUR/USD pair. Initial Jobless Claims for the week ending February 14 were higher than expected, coming in at 219K versus an estimated 215K.
FOMC Meeting Minutes
The Federal Open Market Committee (FOMC) minutes from January's meeting revealed policymakers' concerns about persistent inflation, leading them to hesitate on further monetary easing. The minutes also indicated that producers are likely to pass import tariff costs onto consumers, potentially increasing inflationary pressures and allowing the Federal Reserve to maintain a restrictive monetary policy.
US Dollar Performance
Despite hawkish FOMC minutes that typically support the US Dollar, Trump's economic policies appear to be driving current market trends.
US Dollar Price Changes
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.23% | -0.21% | -0.86% | -0.15% | -0.44% | -0.55% | -0.19% | |
| EUR | 0.23% | 0.02% | -0.66% | 0.08% | -0.21% | -0.32% | 0.02% | |
| GBP | 0.21% | -0.02% | -0.64% | 0.06% | -0.23% | -0.34% | 0.02% | |
| JPY | 0.86% | 0.66% | 0.64% | 0.72% | 0.43% | 0.27% | 0.67% | |
| CAD | 0.15% | -0.08% | -0.06% | -0.72% | -0.28% | -0.40% | -0.04% | |
| AUD | 0.44% | 0.21% | 0.23% | -0.43% | 0.28% | -0.11% | 0.23% | |
| NZD | 0.55% | 0.32% | 0.34% | -0.27% | 0.40% | 0.11% | 0.37% | |
| CHF | 0.19% | -0.02% | -0.02% | -0.67% | 0.04% | -0.23% | -0.37% |
Market Movers
- EUR/USD: Higher due to US Dollar weakness.
- Euro (EUR): Underperforming as traders anticipate further ECB rate cuts. However, ECB member Isabel Schnabel hinted at a potential halt in monetary expansion due to upside risks to inflation.
Geopolitical Factors
- Optimism surrounding a potential Russia-Ukraine truce could support the Euro. President Trump has agreed to further discussions involving Russia, Ukraine, and Europe to seek an end to the conflict.
- A peace agreement could improve global supply chains and lower energy prices, benefiting the Eurozone, which was significantly reliant on Russian energy imports.
Upcoming Economic Data
The upcoming flash Purchasing Managers Index (PMI) data for February will be a key trigger for both the US Dollar and the Euro.
Technical Analysis
EUR/USD is trading around 1.0440, with the 50-day Exponential Moving Average (EMA) providing support near 1.0430. The 14-day Relative Strength Index (RSI) is struggling to surpass 60.00. A break below the February 10 low of 1.0285 would signal further downside, while a move above the December 6 high of 1.0630 would favor Euro bulls.