FX.co ★ Euro Edges Higher

The euro strengthened, nearing the $1.08 mark, driven by a widespread decline in the dollar amidst escalating trade conflicts. The Trump administration declared a 25% tariff on all vehicles not manufactured in the United States, set to commence on April 2. Additionally, there were threats of imposing significantly larger tariffs on the European Union and Canada if they collaborated to counteract U.S. trade actions. In retaliation, the European Union is anticipated to introduce its own tariffs as early as next week. The President of the European Commission pledged to safeguard EU workers, businesses, and consumers while remaining committed to pursuing a negotiated settlement. These tariffs are expected to have a substantial impact on the European economy, with Germany being particularly affected. Nearly one-quarter of the EU's vehicle exports are directed to the U.S., the most crucial market for German automotive exports. In monetary developments, the European Central Bank reduced interest rates by 25 basis points in March, as forecasted. Furthermore, ECB official Cipollone remarked that the justification for another rate cut is becoming more compelling.