EUR/USD is holding gains near 1.1630 at the time of writing, after bouncing from seven-week lows of 1.1585 earlier on Monday. The euro zone’s lower-than-expected final consolidated index of consumer prices (HICP) failed to hurt the euro, which draws support from a weaker US dollar due to renewed tariff threats.
President Trump rattled markets over the weekend, threatening to impose additional 10% tariffs on European countries that oppose the US annexation of Greenland. Europe responded with the prospect of retaliatory measures amid an unprecedented rift between allies that could cause an existential crisis in the North Atlantic Treaty Organization (NATO).
These events have sparked a state of risk aversion in the market and a tense atmosphere ahead of the Davos Economic Forum, where US President Trump and his team will meet with representatives from most of the countries targeted by the latest round of tariffs. Trump’s speech on Wednesday will likely be one of the highlights of the week
In the Eurozone economic calendar on Monday, all eyes will be on the final CPI reading for December. The US calendar is empty amid the Martin Luther King Jr. Day bank holiday, and investors will be paying attention to the third-quarter US gross domestic product (GDP) and personal consumption expenditures (PCE) price index, both due for release on Thursday.
Euro price today
The table below shows the percentage change of the Euro (EUR) against the major currencies listed today. The euro was the strongest against the US dollar.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | -0.21% | -0.20% | -0.14% | -0.20% | -0.25% | -0.49% | -0.53% | |
| euro | 0.21% | 0.00% | 0.09% | 0.03% | -0.03% | -0.28% | -0.32% | |
| GBP | 0.20% | -0.00% | 0.08% | 0.01% | -0.04% | -0.28% | -0.32% | |
| JPY | 0.14% | -0.09% | -0.08% | -0.07% | -0.12% | -0.36% | -0.41% | |
| Canadian | 0.20% | -0.03% | -0.01% | 0.07% | -0.04% | -0.28% | -0.34% | |
| Australian dollar | 0.25% | 0.03% | 0.04% | 0.12% | 0.04% | -0.25% | -0.29% | |
| New Zealand dollar | 0.49% | 0.28% | 0.28% | 0.36% | 0.28% | 0.25% | -0.05% | |
| Swiss franc | 0.53% | 0.32% | 0.32% | 0.41% | 0.34% | 0.29% | 0.05% |
The heat map shows the percentage changes in major currencies versus each other. The base currency is chosen from the left column, while the counter currency is chosen from the top row. For example, if you select EUR from the left column and move along the horizontal line to USD, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily Summary Market Movers: Trump’s tariffs hurt confidence in the US dollar
- The US dollar is the worst performing major currency on Monday. Investors are selling the US currency across the board amid renewed concerns about the economic consequences of Trump’s uncertain trade policy.
- European leaders have indicated retaliatory measures if the new tariffs take effect. The heads of the 27 member states of the European Union are scheduled to meet in the coming days to decide on the measures to be taken against the United States. This is likely to keep investors on edge this week and could lead to sharp fluctuations in Euro pairs.
- In the economic calendar, final Eurozone CPI data was revised down to 1.9% annual growth in December, down from the previous estimate of 2% and also below November’s 2.1% growth. However, core CPI growth was left unchanged at 2.3% year-on-year.
Technical Analysis: EUR/USD is bouncing up from the bottom of the channel
EUR/USD is trading near 1.1630 at the time of writing after bouncing from trendline support below 1.1600. Technical indicators are bouncing higher, with the Moving Average Convergence-Divergence (MACD) line on the 4-hour chart rising above the signal line near the zero mark, highlighting a bullish crossover, and the Relative Strength Index (RSI) heading higher, indicating a gradual build-up in bullish pressure.
However, the pair has been trading within a bearish channel since late December, keeping the broader downtrend intact. Immediate resistance is at 1.1640 (January 13 low) ahead of the top of the channel, which is now at 1.1670.
On the downside, support is located at the bottom of the mentioned channel near 1.1580. In case of further decline, target is late November lows near 1.1560.
(The technical analysis for this story was written with the help of an artificial intelligence tool.)
Frequently asked questions about the euro
The euro is the official currency of the twenty European Union countries that belong to the eurozone. It is the second most traded currency in the world after the US dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily trading volume of more than $2.2 trillion per day. The EUR/USD is the most widely traded currency pair in the world, accounting for a 30% discount on all transactions, followed by EUR/JPY (4%), EUR/GBP (3%), and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the euro area. The European Central Bank sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is to raise or lower interest rates. Relatively high interest rates – or the expectation of higher interest rates – usually benefit the euro and vice versa. The ECB’s Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by the heads of the eurozone’s national banks and the six permanent members, including the President of the European Central Bank, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is one of the important economic indicators for the euro. If inflation rises beyond expected, especially if it is above the ECB’s 2% target, this forces the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to their counterparts usually benefit the euro, because they make the region more attractive as a place for global investors to park their money.
Data releases measure the health of the economy and can affect the euro. Indicators such as GDP, manufacturing and services PMIs, employment, and consumer confidence surveys can all influence the direction of the single currency. A strong economy is good for the euro. Not only does it attract more foreign investment, it may encourage the European Central Bank to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the euro will likely fall. Economic data for the four largest Eurozone economies (Germany, France, Italy and Spain) are of particular interest, as they represent 75% of the Eurozone economy.
Another important data for the Euro is the trade balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports during a certain period. If a country produces highly desirable exports, its currency will gain value from the additional demand generated by foreign buyers seeking to purchase these goods. Therefore, a positive net trade balance strengthens the currency and vice versa for a negative balance.
