EUR\/USD extended its rebound from Friday\u2019s one-month low in the 1.1750\u20131.1740 zone. It reached about 1.1835 in the Asian session, as the US Dollar weakened across markets.<\/p>\n
The US Supreme Court ruled on Friday that Donald Trump lacked authority to impose wide reciprocal tariffs under the IEEEPA. After the ruling, a new 15% tariff framework was announced, which added to concerns about economic effects from rising trade tensions.<\/p>\n
US data showed weaker growth, which offset stronger inflation readings and pulled the Dollar from a four-week high. The first estimate of fourth-quarter GDP put annualised growth at 1.4%, down from 4.4% in the third quarter and below expectations.<\/p>\n
Inflation data showed the core PCE Price Index rose 0.4% month-on-month in January, with the yearly rate at 3.0%, the highest since November 2023. This may support the case for holding rates in March, but markets still price a cut in June and at least two 25-basis-point cuts in 2026.<\/p>\n
In Europe, uncertainty linked to ECB President Christine Lagarde\u2019s tenure and trade-war concerns weighed on the euro. The European Parliament\u2019s trade chief said the EU may freeze ratification of a US trade deal until details of US trade policy are provided.<\/p>\n
We are seeing a weaker US dollar push the EUR\/USD pair higher, moving away from last month’s lows. This is driven by disappointing US growth data from late 2025 and ongoing trade disputes. However, stubbornly high inflation complicates the outlook for Federal Reserve policy.<\/p>\n
Given the conflict between slowing growth and rising prices, we have seen implied volatility in EUR\/USD options increase. One-month volatility is now at its highest level since the fourth quarter of 2025, reflecting significant uncertainty. The weaker-than-expected January jobs report, which showed payrolls expanding by only 95,000, has only added to these concerns about the US economy.<\/p>\n
The market is increasingly certain the Federal Reserve will cut rates, with Fed Funds futures now pricing in a greater than 70% chance of a 25-basis-point cut by the June meeting. This expectation of lower US yields makes holding dollars less attractive. Derivative traders should monitor this pricing closely, as any unexpectedly strong data could cause a sharp reversal.<\/p>\n
On the European side, recent data provides a modest counter-narrative to the prevailing gloom. The latest German IFO Business Climate survey unexpectedly improved, and flash Eurozone CPI for February held steady at 2.4%, easing some immediate pressure on the ECB. This relative stability in Europe, compared to the slowing US, provides a fundamental reason for the euro’s recent strength.<\/p>\n
For traders positioned for a continued rise in EUR\/USD towards the 1.1900 level, buying call options could be a prudent strategy. This allows for participation in further US dollar weakness while defining the maximum risk if trade talks suddenly improve or US data surprises to the upside. The increased cost of options, due to higher volatility, reflects the significant event risk on the horizon.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD rebounds to 1.1835 as Dollar slips after tariff ruling, weak GDP; hot PCE supports steady Fed.<\/p>\n","protected":false},"author":62,"featured_media":16962,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42503","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/42503","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=42503"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/42503\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16962"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=42503"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=42503"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=42503"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}