The US dollar is declining in the foreign exchange market.
The Union's speech increases uncertainty in the markets.
Trade tensions between the United States and the European Union
Markets are awaiting new clues about the path of European interest rates.
The euro rose in the European market on Wednesday against a basket of global currencies, moving higher against the US dollar, benefiting from renewed negative pressure on US assets, especially the dollar, following President Donald Trump’s speech to Congress, which increased uncertainty in the markets.
With inflationary pressures easing on monetary policymakers at the European Central Bank, hopes have been renewed for at least one European interest rate cut this year, pending further evidence on the timing of such a potential reduction.
Price overview
Euro exchange rate today: The euro rose against the dollar by about 0.3% to ($1.1805), from today’s opening price of ($1.1772), and recorded a low of ($1.1771).
The euro ended Tuesday's trading down 0.1% against the dollar, resuming losses that had paused for two days as part of a recovery from a four-week low of $1.1742.
US dollar
The dollar index fell more than 0.2% on Wednesday, resuming losses that had paused for two sessions, reflecting the decline in the US currency against a basket of major and minor currencies.
President Donald Trump’s State of the Union address to Congress has increased uncertainty in the markets, as it did not include sufficient assurances about the stability of trade policy after the Supreme Court’s ruling invalidating previous tariffs, prompting investors to sell dollar-denominated assets.
trade tensions
The European Parliament has decided to postpone the vote on the trade agreement with the United States, in response to the customs chaos caused by President Donald Trump's recent decisions.
Some European parliamentarians describe the current agreement as favoring the United States, as it grants American products zero-tariff access to the European market, while Europe is obligated to pay tariffs that can reach 15%, which has increased pressure to suspend ratification.
European interest rate
Recent data released in Europe has shown that inflationary pressures are slowing down for monetary policymakers at the European Central Bank.
Consequently, the money market's pricing of the likelihood of the European Central Bank cutting European interest rates by about 25 basis points next March has risen from 10% to 25%.
Traders have revised their expectations from the European Central Bank keeping interest rates steady throughout this year to at least one cut of around 25 basis points.
In order to reprice the above probabilities, investors are awaiting further economic data from the Eurozone on inflation, unemployment and wage levels.
