Key moments

• The EUR/USD pair’s Wednesday recovery saw it hit 1.1361.
• Meanwhile, the US Dollar Index remains stuck below the 100 mark.
• The US dollar is struggling amid prevailing unease surrounding global tariff-related tensions.

Euro Gains Momentum While Dollar Weakens

On Wednesday, the EUR/USD pair experienced a significant jump of 0.74% to reach 1.1361. This upward momentum for the shared European currency occurred against a backdrop of increasing skepticism regarding the US dollar’s stability as the US Dollar Index (DXY) remained below the key 100 threshold.

The primary catalyst behind the euro’s resurgence appears to be growing investor unease surrounding the erratic and unpredictable nature of US President Donald Trump’s trade policies. Recent pronouncements and actions regarding tariffs have sown doubt about the long-term stability of the dollar as a reliable store of value during times of global economic uncertainty.

It is this erosion of the dollar’s perceived safe-haven status that ING analysts cited when suggesting that the EUR/USD pair could potentially advance further, targeting the 1.1500 level as investors seek alternatives to the greenback. They anticipate that the highly liquid euro will emerge as a significant beneficiary of the dollar’s rotation.

Adding to the euro’s strength is anticipation surrounding the European Central Bank’s Thursday meeting. According to market expectations, the ECB is likely to implement a 25 basis point cut to its Deposit Facility Rate, bringing it down to 2.25%. Furthermore, optimism surrounding potential trade negotiations between the European Union (EU) and the United States is also contributing to the euro’s positive momentum. Spanish Economy Minister Carlos Cuerpo recently expressed strong confidence in a potential balanced and free trade agreement between the EU and the US.

Looking ahead, the attention of investors and traders will also be closely focused on the release of US Retail Sales data for March. This key indicator of consumer spending is expected to show a robust growth rate of 1.3% for the month, significantly higher than February’s 0.2%. The actual figures will provide crucial insights into the real-world impact of the ongoing trade uncertainties on consumer behavior and the broader US economy, potentially influencing the future trajectory of the EUR/USD pair.