When the U.S. announced a 25% tariff on Japan and South Korea, the Japanese yen became weaker. Now, it is expected that a letter about tariffs to the EU will also be announced soon. The U.S. has a large trade deficit with the EU, so there is a chance that the U.S. will place a tariff of 25% or more on EU goods. If that happens, the euro may fall.
Yesterday, the head of Ireland’s central bank said the euro is not ready to replace the U.S. dollar as the world’s main currency. Also, last week, the ECB Vice President De Guindos said that if the euro goes above $1.20, it would be hard to manage monetary policy. Because of these reasons, if the EU tariff news comes out, people may start selling the euro, causing the price to drop.
Expected EUR/USD range: 1.1640 – 1.1740
Note: This information does not guarantee profit. Please make your own decisions when trading.