Tariff pause adds to volatility – Euro currency news daily

U.S. President Donald Trump announced a 90-day pause on most new U.S. tariffs late on Wednesday. However, at the same time, Trump raised tariffs on Chinese imports to 125% from 104%, further raising trade tensions between the world’s two largest economies and ramping up uncertainty over the global economy. Additionally, the 10% blanket duty on almost all U.S. imports will remain in effect, the White House said. The announcement also does not appear to affect duties on autos, steel and aluminium that are already in place. European Commission President Ursula von der Leyen, on Thursday welcomed Trump’s announcement of a pause in reciprocal tariffs. She added that tariffs are taxes that only hurt businesses and consumers.

GBP/USD is at a 24 hours high at the time of writing, currently 1.2880. GBP/EUR has stopped an 8-day loss, bouncing back above 1.1700 from touching 1.1550 yesterday. EUR/USD is slightly off the highs, but remains above 1.1000 for today’s start.

There is little in the way of macroeconomic data from Europe today, so eyes will be on the March report on US inflation this afternoon. It’s debatable how much significance the markets will place on this report given the numbers mostly predate the latest round of hefty levies imposed by Trump. Amidst the chaos of yesterday’s ‘Trump tariff’ pause, the meeting minutes from the FED stated policymakers were worried U.S. President Donald Trump’s trade policy could deal a blow to economic growth, but signalled they won’t be quick to ride to the rescue with interest rate cuts because they expect increased tariffs to boost inflation.

Source: EUbusiness