FX.co ★ Euro Remains Close to 6-Month High Amid Escalating Trade Tensions

The euro positioned itself near the $1.10 mark, its highest point since early October 2024, as the dollar faced downward pressure amidst growing trade tensions. On Friday, China revealed its intentions to implement a 34% tariff on all U.S. goods starting April 10, in retaliation to President Trump's decision to apply a 10% tariff on all imports, with increased rates for certain countries, including a 20% tariff on EU goods and an additional 34% duty on Chinese imports. In response, French President Emmanuel Macron urged companies to halt U.S. investments, while the European Commission indicated preparations for countermeasures were underway. Concurrently, President Trump dismissed worries regarding inflation and a potential recession. Consequently, the markets are now anticipating over a 90% likelihood of a 25 basis point cut in the European Central Bank's interest rates in April, with projections for the deposit rate to decrease to 1.65% by December, a drop from the current 2.5%.