- EUR/USD falls sharply below 1.0850 as investors turn cautious over the EU-US trade relationship outlook.
- US President Trump threatens to respond to EU’s proposed counter-tariffs.
- Investors await the meeting of German leaders on a debt restructuring plan.
EUR/USD slumps below 1.0850 in North American trading hours on Thursday. The major currency pair slides as the Euro (EUR) weakens on fresh escalation in potential tariff war between the European Union (EU) and the US. On Wednesday, US President Donald Trump said that he would respond to counter-tariffs proposed by the EU on 26 billion Euro worth of US goods. Trump’s comments came just before the meeting with Irish Prime Minister Micheál Martin, after which he said that “there’s a massive deficit that we have with Ireland and with other countries” and added he will impose reciprocal tariffs on them for taking advantage of the US.
During the European trading hours on Wednesday, European Commission (EC) President Ursula von der Leyen launched 'swift and proportionate countermeasures' on US imports in the EU in response to steel tariffs. Trump announced a 25% tariff blanket on imports of steel and aluminum, which has come into effect on Thursday. Contrary to the EC's counter-tariff announcement, European Central Bank (ECB) policymaker and Governor of the Bank of Finland said during European trading hours on Thursday that the EU should aim at "negotiated solutions for US tariffs," encouraging the Trump administration to avoid these unnecessary, "harmful tariffs."
The trade war between the shared continent and the US will impact heavily on the German economy, knowing that it is the largest exporter of the Eurozone to the US. In European trading hours on Thursday, the European Central Bank (ECB) policymaker and Bundesbank President Joachim Nagel warned that US trade tariffs on the European Union (EU) could push “Germany into recession this year” in an interview with BBC News.
Meanwhile, trades are also cautious ahead of the meeting of German leaders to discuss the debt restructuring to boost defense spending and stimulate economic growth. German debt reforms are expected to get cleared in the lower house of Parliament on Tuesday as Franziska Brantner-led-German Green Party agreed to negotiate with likely next Chancellor Friedrich Merz and Social Democratic Party’s (SDP) co-leader Lars Klingbei.
The Euro has outperformed lately as investors expect the German debt restructuring plan will be inflationary for the economy. Such a scenario would force traders to pare European Central Bank (ECB) dovish bets.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.26% | 0.10% | -0.22% | 0.10% | 0.50% | 0.46% | 0.23% | |
| EUR | -0.26% | -0.15% | -0.42% | -0.17% | 0.25% | 0.22% | -0.03% | |
| GBP | -0.10% | 0.15% | -0.27% | -0.01% | 0.40% | 0.38% | 0.16% | |
| JPY | 0.22% | 0.42% | 0.27% | 0.25% | 0.67% | 0.63% | 0.43% | |
| CAD | -0.10% | 0.17% | 0.01% | -0.25% | 0.43% | 0.39% | 0.17% | |
| AUD | -0.50% | -0.25% | -0.40% | -0.67% | -0.43% | -0.02% | -0.22% | |
| NZD | -0.46% | -0.22% | -0.38% | -0.63% | -0.39% | 0.02% | -0.18% | |
| CHF | -0.23% | 0.03% | -0.16% | -0.43% | -0.17% | 0.22% | 0.18% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Daily digest market movers: EUR/USD weakens as US Dollar gains ground
- A sharp corrective move in the EUR/USD pair is also driven by a decent recovery in the US Dollar (USD) amid increased demand for safe-haven assets due to United States (US) President Trump’s tariff policies. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, jumps to near 104.00 after recovering from its four-month low of 103.20.
- The Greenback recovers despite US consumer and producer inflation having cooled down faster than expected in February. In the 12 months to February, the headline PPI rose by 3.2%, slower than estimates of 3.3% and the 3.7% increase seen in January. In the same period, the core PPI – which excludes volatile food and energy prices – decelerated at a faster pace to 3.4% from expectations of 3.5% and the former reading of 3.8%. Month-on-month core PPI deflated by 0.1% while the headline figure remained flat.
- Signs of taming inflationary pressures bode poorly for the US Dollar as they force traders to raise bets supporting the Federal Reserve (Fed) to ease monetary policy. According to the CME FedWatch tool, there is a 76% chance that the Fed will cut interest rates in the June meeting.
- Going forward, the next major trigger for the US Dollar will be the two-day Fed’s monetary policy meeting on March 18-19. The central bank is almost certain to keep interest rates steady in the range of 4.25%-4.50%. Investors will pay close attention to the Fed’s guidance on inflation and the economic outlook under the leadership of Donald Trump.
Technical Analysis: EUR/USD holds key level of 1.0800
EUR/USD drops vertically to nearr 1.0820 on Thursday, extending correction after posting a fresh five-month high near 1.0950 on Tuesday. However, the long-term outlook of the major currency pair is bullish as it holds above the 200-day Exponential Moving Average (EMA), which trades around 1.0650.
The 14-day Relative Strength Index (RSI) holds above 60.00, suggesting that the bullish momentum is intact
Looking down, the December 6 high of 1.0630 will act as the major support zone for the pair. Conversely, the psychological level of 1.1000 will be a key barrier for the Euro bulls.
Economic Indicator
Producer Price Index (YoY)
The Producer Price Index released by the Bureau of Labor statistics, Department of Labor measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation. Generally speaking, a high reading is seen as positive (or bullish) for the USD, whereas a low reading is seen as negative (or bearish).
Read more.Last release: Thu Mar 13, 2025 12:30
Frequency: Monthly
Actual: 3.2%
Consensus: 3.3%
Previous: 3.5%
Source: US Bureau of Labor Statistics
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
Gold gives away some gains, slips back to $2,980
Gold retraced from its earlier all-time highs above the key $3,000 mark on Friday, finding a footing around $2,980 per troy ounce. Profit-taking, rising US yields, and a shift to a risk-on environment seem to be putting the brakes on further gains for the metal.
EUR/USD remains firm and near the 1.0900 barrier
EUR/USD is finding its footing and trading comfortably in positive territory as the week wraps up, shaking off two consecutive daily pullbacks and setting its sights back on the pivotal 1.0900 mark—and beyond.
GBP/USD remains depressed, treads water in the low-1.2900s
GBP/USD is holding steady in consolidation territory after Friday’s opening bell on Wall Street, hovering in the low-1.2900 range. This resilience comes despite disappointing UK data and persistent selling pressure on the USD.
Crypto Today: BNB, OKB, BGB tokens rally as BTC, Shiba Inu and Chainlink lead market rebound
Cryptocurrencies sector rose by 0.13% in early European trading on Friday, adding $352 million in aggregate valuation. With BNB, OKB and BGB attracting demand amid intense market volatility, the exchange-based native tokens sector added $1.9 billion.
Week ahead – Central banks in focus amid trade war turmoil
Fed decides on policy amid recession fears. Yen traders lock gaze on BoJ for hike signals. SNB seen cutting interest rates by another 25bps. BoE to stand pat after February’s dovish cut.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.