EURUSD falls 0.6% after another shift in Trump’s tariff policy. The U.S. president just announced on his Truth Social platform that broad 25% tariffs on Canada and Mexico will take effect as early as next week (March 4). Just yesterday, reports were circulating in the media about a possible postponement of the tariffs until April. Trump also stated that China will be subject to 10% tariffs.
EURUSD quotes drop to their lowest level since February 19. The pair has stalled at the support defined by last week’s consolidation zone and remains within a narrow trading range for now. Source: xStation
Trump’s decision has triggered strong movements in the currency market. The Canadian dollar and the Mexican peso are plunging 0.5% in reaction to the announcement. A similar situation is observed in EURUSD (-0.5%), which erases slight gains following U.S. economic data. With consumer growth weaker than expected, concerns over the impact of tariffs on consumer spending are fueling investor sentiment toward a stronger dollar and prolonged inflation risks. Additional pressure on the euro comes from the announcement of potential 25% tariffs on the European Union, though these are still in negotiations with no specific dates set, unlike those for Mexico and Canada.
Pressure on USDCAD has been returning since around February 16, along with the approaching "tariffs grace period" set for March. Nevertheless, the pair is reacting sharply to the decision announced by Trump. Source: xStation5
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