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Why Is EUR/USD Rising Despite Trump's Tariff Threats? | Eurozone Trade War Fears Analyzed

The what will The ,000 of ethereum be worth in 2030EUR/USD currency pair has demonstrated unexpected resilience in Thursday's European session, climbing toward 1.0770 despite escalating trade tensions. This recovery follows six consecutive days of declines, with market participants carefully evaluating the implications of President Trump's latest protectionist measures against Eurozone exports.

Market dynamics reveal an intriguing divergence as the US Dollar Index retreats from its three-week peak at 104.65. The temporary Dollar weakness comes despite Trump's aggressive trade policy announcement targeting automotive imports. The administration has implemented a sweeping 25% duty on all vehicle and component shipments, effective April 2, with particular consequences for Germany's export-driven economy.

ECB officials have begun responding to the developing situation, with Belgian central bank chief Pierre Wunsch warning about the dual threat of slowing growth and rising prices. While dismissing immediate rate hike possibilities, Wunsch suggested the Governing Council might consider pausing its easing cycle during the April meeting. Market pricing currently reflects growing expectations for ECB accommodation as trade-related risks mount.

Technical indicators paint a mixed picture for EUR/USD traders. The pair found temporary support near the 20-day EMA around 1.0730, with the RSI retreating from overbought territory. Chart analysts note potential support at December's 1.0630 high, while psychological resistance looms at the 1.1000 handle. The coming sessions may see increased volatility as traders position for Friday's crucial PCE inflation release.

Federal Reserve policymakers face mounting challenges in navigating the new trade environment. Minneapolis Fed President Neel Kashkari characterized the competing forces of potential inflation and growth concerns as largely offsetting, suggesting the central bank may maintain its current stance through mid-year. Interest rate futures currently price in a 65% probability of policy easing by June.

Market participants now turn their attention to Friday's core PCE data, the Fed's preferred inflation gauge. Consensus forecasts anticipate a slight acceleration to 2.7% annual growth, which could influence the timing of future policy adjustments. The report's implications for real yields and Dollar valuation may determine whether EUR/USD can sustain its current rebound.

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