EUR/USD struggles around the psychological level of 1.0500 in North American trading hours on Thursday. The major currency pair falls as United States (US) President Donald Trump reiterated tariff threats on the Eurozone.
President Trump said in a press conference on Wednesday that he will announce 25% tariffs on "cars and other things" on the Eurozone "very soon." However, Trump didn't provide a timeline for the tariff imposition.
In response to Trump's tariff threats, a European Commission (EC) spokesperson said, "The EU will react firmly and immediately against unjustified barriers to free and fair trade, including when tariffs are used to challenge legal and non-discriminatory policies."
A tariff war between the US and the Eurozone would make the Eurozone economy vulnerable to growth, which is already fractured due to weak demand. Such a scenario would weigh on the Euro (EUR).
Meanwhile, uncertainty over the outcome of negotiations to form a German coalition government has also kept the Euro (EUR) on the backfoot. Victorious Frederich Merz's conservative Christian Democratic Union of Germany (CDU) will most likely form the government with outgoing Chancellor Olaf Scholz's Social Democratic Party of Germany (SPD).
Source: FXStreet
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