FX.co ★ Euro Rallies as Trade Tensions Deepen, ECB Decision in Focus

The euro ascended past $1.14, marking its highest level since April 21, as investors retreated from US assets amid increasing uncertainty in trade policy. This development came on the heels of President Donald Trump’s declaration to double tariffs on steel and aluminum. Concurrently, tensions with Beijing heightened with both nations accusing each other of breaching a recent tariff ceasefire. Market participants are now focusing on the forthcoming European Central Bank (ECB) policy meeting scheduled for Thursday and the US payrolls data set for release on Friday. While the ECB is anticipated to reduce interest rates by an additional 25 basis points, investors will closely observe any guidance regarding the bank's future trajectory. This is particularly relevant given that some officials have recently adopted a more hawkish stance, advocating for a pause in further easing to evaluate the potential repercussions of US tariffs on inflation and economic growth.