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Forex Today: Eurozone GDP and US Retail Sales data to wrap up volatile week

Here is what you need to know on Friday, February 14:

The US Dollar holds steady in the European morning on Friday after suffering large losses against its major rivals on Thursday. Eurostat will publish preliminary Employment Change and Gross Domestic Product (GDP) data for the fourth quarter. Later in the session, the US economic calendar will feature Retail Sales and Industrial Production data for January.

US Dollar PRICE This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the British Pound.

 USDEURGBPJPYCADAUDNZDCHF
USD -1.29%-1.29%0.82%-0.78%-0.76%-0.44%-0.61%
EUR1.29% 0.06%2.25%0.63%0.53%0.94%0.76%
GBP1.29%-0.06% 2.03%0.54%0.47%0.88%0.71%
JPY-0.82%-2.25%-2.03% -1.62%-1.49%-1.25%-1.39%
CAD0.78%-0.63%-0.54%1.62% 0.04%0.31%0.13%
AUD0.76%-0.53%-0.47%1.49%-0.04% 0.41%0.23%
NZD0.44%-0.94%-0.88%1.25%-0.31%-0.41% -0.18%
CHF0.61%-0.76%-0.71%1.39%-0.13%-0.23%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).

In the early American session on Thursday, US President Donald Trump hinted that they could announce reciprocal tariffs later in the day. With the immediate reaction, the USD gathered strength against its peers. Later in the day, however, the market mood improved and the USD came under renewed selling pressure as investors breathed a sigh of relief. Trump refrained from imposing fresh tariffs and explained that he signed a memo ordering his economics team to devise a plan for reciprocal tariffs on every country that charges duties on US imports. Major equity indexes in the US ended the day decisively higher, and the USD Index lost more than 0.8% on the day.

EUR/USD gathered bullish momentum in the second half of the day on Thursday and climbed to a fresh two-week high near 1.0470. The pair stages a technical correction early Friday but manages to hold above 1.0450.

GBP/USD benefited from the improving risk mood and rose to its highest level in over a month, above 1.2570. The pair stays relatively quiet in the European morning on Friday and trades in a tight range, slightly above 1.2550.

Following a three-day rally, USD/JPY reversed its direction on Thursday and lost more than 1% on the day. The pair continues to edge lower to begin the European session and trades near 152.50.

Gold extended its uptrend and rose more than 0.8% on Thursday, as the benchmark 10-year US Treasury bond yield declined sharply following the latest headlines surrounding Trump's tariff policy. In the European morning on Friday, XAU/USD trades marginally higher on the day, above $2,930.

Tariffs FAQs

Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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