The dollar is falling 1.2% against the euro, a pronounced decline, taking into account that it is the largest since November 2023 and that, usually, movements are more contained in the currency market. On the day Donald Trump takes office as president of the United States, one of the focuses is on his first decisions once he enters the White House and on his tariff policy.
An exclusive of The Wall Street Journal this Monday qualifies Trump’s foreign trade plans. Although it maintains its protectionist approach, will not take action from the first day of his mandate, as previously feared. Now it seems that the Republican is going to ask government agencies to study the trade deficits that exist with certain countries before taking action. Specifically, he will ask them to analyze whether China complies with the 2020 trade agreement.
The euro benefits in the pair and each community currency is exchanged at $1,039. Although the community currency has been weakening since Trump won the elections in the United States, this Monday’s movement serves to put an end to this bad streak. In fact, there are already analysts who anticipate that a possible scenario for the pair is parity and even the surprise of the dollar to the euro (something that has only occurred exceptionally in the history of the community currency).
In addition to the new term of Donald Trump, the euro has been harmed by the different rate expectations on both sides of the Atlantic. The European Central Bank (ECB) will continue to ease monetary conditions, while the Federal Reserve (Fed) is in no hurry to make further cuts. On the other hand, many experts also propose an inflationary rebound with the Republican’s mandate, which further reduces the Fed’s ability to lower the federal funds rate.
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