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EUR/USD Corrects As Trump Tariff Concerns Boost Safe-Haven Appeal
Monday, 27 January 2025 15:06 WIB | EUR/USD | EuroEUR/USD

EUR/USD corrected near 1.0450 in the European session on Monday (1/27) after hitting a six-week high near 1.0520 on Friday. The major currency pair faced pressure as the US Dollar (USD) started the week on a positive note amid risk-averse market sentiment. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, attempted to recover from last week's losses and surged near 107.75.

The US Dollar's ​​safe-haven appeal has been boosted as US President Donald Trump's tariff concerns have returned. Trump imposed a 25% tariff on South American trading partner Columbia overnight after the country refused to accept military flights carrying deportees from the US. However, the White House later reported that the Colombian government agreed to "Trump's terms for accepting illegal immigrants", and Trump's proposed tariffs are "now on hold", the Associated Press (AP) reported.

The greenback also drew bids on Monday as market sentiment was cautious, with investors awaiting interest rate decisions from the Federal Reserve (Fed) and the European Central Bank (ECB) on Wednesday and Thursday, respectively.

According to the CME FedWatch tool, the Fed is set to keep interest rates unchanged in a range of 4.25%-4.50%. Investors will be watching Fed Chair Jerome Powell's press conference to determine whether policymakers are comfortable with Trump's call for an immediate rate cut.

On the US economic front, investors will focus this week on the Durable Goods Orders and Personal Consumer Expenditure (PCE) Price Index data for December and the preliminary Q4 Gross Domestic Product (GDP) data. (AL)

Source: FXstreet

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