The euro is set to end Tuesday's session (2/18) with a loss of more than 0.30% against the greenback as the S&P 500 hit a record high during the North American session. At the time of writing, EUR/USD is trading at 1.0445 below its opening price. Risk appetite has improved, but US President Donald Trump reiterated that he will impose a 25% tariff on imported cars. He added that he will announce major companies that will return to the United States, related to chips and cars.

EUR/USD has recovered over the past few weeks amid progress in peace talks related to the Ukraine-Russia conflict. Previously, a high-level meeting between top US officials and Russian policymakers met for the first time, in a meeting that excluded Ukraine from initial discussions. As a result, Ukrainian President Volodymyr Zelenskiy postponed his planned visit to Saudi Arabia on Wednesday until next month, with sources saying the decision was made to avoid lending "legitimacy" to the Russia-US talks.

In February, the US NY Fed Empire State Manufacturing Index jumped from -12.6 to 5.7. Oliver Allen, Senior US Economist at Pantheon Macroeconomics, said, "The general improvement in the Empire survey in recent months has mirrored the improvement in the headline ISM manufacturing index." Other data showed the NAHB Housing Market Index fell 5 points from 47 to 42 due to high mortgage rates and tight housing inventories.

Across the pond, the Eurozone (EU) ZEW Economic Sentiment Index rose in February from 18 to 24.2, indicating that successive interest rate cuts by the European Central Bank (ECB) have improved the economic outlook. Meanwhile, the ECB's Holzmann said a rate cut in March was likely, although he said that decisions in favor of additional easing were becoming more difficult, according to Bloomberg. There was no economic agenda on Wednesday in the EU. In the US, the latest FOMC meeting minutes, Housing Starts and Building Permits for January.(Newsmaker23)

Source: FXstreet