The impact of the trade war on the euro/dollar and economic outlook
Trade war scenario weighs on the Euro
The EUR/USD pair depreciated by -0.56% to 1.0818.
The ECB President announced that if the US imposes 25% tariffs on steel and aluminum and the EU responds with countermeasures, economic growth in the EZ could be negatively impacted by 50 BPS in the first year.
Furthermore, the Fed decided to keep the Fed Funds rate unchanged this week, as widely anticipated. Powell stated that the Fed is in no rush to cut rates while waiting for more clarity on the Trump administration's tariffs and their impact on inflation and economic growth.
