The European Parliament\u2019s trade chief said the EU will propose pausing the ratification of a trade deal with the US. This would remain on hold until the Trump administration provides details of its trade policy, according to Bloomberg.<\/p>\n
ECB President Christine Lagarde said changes in US trade policy could disrupt business again. She also referred to a recent Supreme Court decision and said any new tariff measures should be planned so firms can anticipate them.<\/p>\n
In markets, the euro rose against the dollar. At the time of publication, EUR\/USD was up 0.37% at 1.1830.<\/p>\n
We remember the uncertainty in early 2025 when the European Union considered freezing the US trade deal ratification over tariff threats. At that time, the EUR\/USD was reacting, trading around the 1.1830 level. That initial rhetoric set the stage for the volatility we have seen since.<\/p>\n
That friction is no longer just a threat, which has pushed the EUR\/USD down to around 1.1150 today. Data from late last year showed German industrial production contracted by 0.5% in the fourth quarter, a direct result of export headwinds. This economic softness is a key factor weighing on the single currency.<\/p>\n
Given this backdrop, we are seeing a marked increase in currency volatility. Implied volatility on one-month EUR\/USD options has climbed from around 7% late last year to over 9.5% in recent sessions. This suggests traders should consider strategies that benefit from price swings, such as buying straddles or strangles, rather than simple directional bets.<\/p>\n
The situation creates a policy challenge, with January\u2019s Eurozone inflation data still stubbornly high at 2.4%. This complicates the European Central Bank’s path, as they are hesitant to cut rates to support growth while inflation remains above their target. Traders in the interest rate swap market should be positioned for the ECB to remain on hold longer than previously expected.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EU may pause US trade deal ratification until Trump clarifies policy; Lagarde warns tariffs disrupt markets.<\/p>\n","protected":false},"author":62,"featured_media":16965,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42501","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-ca\/wp-json\/wp\/v2\/posts\/42501","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=42501"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42501\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16965"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42501"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42501"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42501"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}