The euro (EUR) is trading under pressure amid broadly stronger US dollar (USD) on tariff threats. Yesterday at the last GC meeting, the ECB cut its policy rate for the fifth consecutive meeting by 25bp. The currency pair was last at 1.0370, noted FX analysts Frances Cheung and Christopher Wong of OCBC.

"The deposit rate is now at 2.75%. The decision was unanimous and the Council did not discuss the possibility of a larger cut. Lagarde said that interest rates are still in restrictive territory, and it is too early to discuss when the ECB should stop cutting rates. According to a Reuters report, three ECB policymakers commented that they thought a further rate cut was likely to be made at the March meeting without much resistance before the debate within the Governing Council on further easing becomes more heated." "On the implications of tariffs, Lagarde said that tariffs would have a 'global negative impact' on growth but the potential impact on inflation is 'much more complicated' due to potential retaliation and market adjustments. Recalling earlier this week, the FT reported that US Treasury Secretary Scott Bessent supports universal tariffs on US imports, starting at 2.5% while Trump said he wants tariffs 'much larger' than 2.5%."

"Near-term risks for EUR are tilted to the downside on tariff threats and EU growth concerns (risk that the ECB may need to cut deeper). Bullish momentum on the daily chart shows signs of fading but the RSI decline is modest. Consolidation is likely. Supports are at 1.0360 (21-DMA) and 1.0240. Resistances are at 1.0420/30 (23.6% Fibonacci retracement from September high to January low, 50-DMA), 1.0520."(AL)

Source: FXstreet