US President Donald Trump reaffirmed plans to implement broad tariffs in April, adding to uncertainty. In response, the European Union indicated it is preparing its own set of countermeasures against potential US trade actions.
With risk sentiment weakening, EUR/USD remains under pressure and may face further declines as April 2 approaches.
President Trump Plans 25% Tariff on Imported Vehicles
The Trump administration is moving forward with a broad tariff on all copper imports into the US, aligning with its recent 25% flat import tax on steel and aluminum. In addition, President Trump is expected to introduce new tariffs on automobiles. European Union (EU) officials anticipate that the US may impose a tariff of approximately 20% on a range of goods, though the specifics remain uncertain.
Fed’s Musalem Expects Inflation to Return to 2% by 2027
These tariffs may be part of a broader “reciprocal” trade policy set to take effect on April 2. It remains unclear whether certain countries will receive exemptions. The proposed measures aim to match tariffs imposed by other nations on US goods, introducing a new layer of complexity to international trade policies. Additionally, President Trump has suggested that VAT and luxury taxes could be considered indirect tariffs on US exports and may be included in the reciprocal tariff structure.
US Economic Data Outlook
US GDP growth figures are set for release on Thursday, though the final print is not expected to generate significant market movement. The key focus this week will be the Core Personal Consumption Expenditure (PCE) Price Index, scheduled for Friday. Investors are watching closely to see if the recent rise in inflation is temporary, but forecasts indicate that annualized PCE inflation may increase to 2.7% year-over-year in February.
EUR/USD Price Forecast
EUR/USD continues to decline, with six consecutive days of losses pushing the pair nearly 2% lower from last week’s peak above 1.0950. Bearish momentum remains strong, and the pair is approaching the 200-day Exponential Moving Average (EMA), located just below the 1.0700 level.
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