EUR/USD surged on Wednesday, climbing 1.75% and knocking on the 1.0800 handle as risk sentiment rises following yet another pivot from US President Donald Trump on his own tariff strategy.

President Trump is once again pumping the brakes on his own trade strategy of threatening to impose stiff import taxes on his own citizens in order to punish other countries for a litany of Donald Trump's perceived slights.

The European Central Bank (ECB) is set to trim interest rates by another 25 bps on Thursday, taking the Main Refinancing Operations Rate down to 2.65% and dropping its Rate on Deposit Facility to 2.5%. Despite an overall tone of weak or lopsided growth permeating the EU's economic dataset in the first quarter, rate traders have trimmed their bets of additional ECB rate cuts through the rest of the year as inflation continues to prove to be more of a problem than central planners anticipated.

Rate markets now see less than 70 bps in rate cuts for the remainder of 2025.

The US ADP Employment Change for February showed only 77K new jobs, significantly below the forecast of 140K and March's 186K. Nonetheless, the ADP results have consistently failed to correlate with Nonfarm Payrolls (NFP) since a reporting change in 2022, indicating that the weak performance holds little significance.

Source: FXStreet