Euro struggles over US tariff fears

Matthew Ryan, CFA Ebury

The euro remains the worst performer in the G10 since the election, as investors brace for onerous US tariffs on Europe following the appointments of hardliners within the new Trump cabinet.

For now, EUR/USD appears to have hit a temporary floor around the 1.05 level, and it may be difficult to break below this threshold aside from any additional negative headlines, either out of Europe or the incoming Trump administration.

All eyes in the Euro Area this week will be on the October business activity PMI numbers on Friday, with economists pencilling in another reading of 50 that would signify flat growth. In the meantime, communications from ECB members Lagarde and De Guindos (Wednesday and Friday) and Cipollone, Elderson and Lane (Thursday) could prove market moving.

Author

Matthew Ryan, CFA

Ebury

Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.

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