EUR: Staying offered in Europe - ING

EUR/USD remains offered as the weekend announcement over steel tariffs was the first to hit the EU, ING's FX analyst Chris Turner notes. 

Decline towards the 1.0250/60 range seems probable

"Europe is now bracing for other sectors, such as autos, to be tariffed. There is little justification for the EU bloc as a whole to be hit with reciprocal tariffs since the EU tariff regime is relatively low. But, presumably, European politicians are more fearful about broader tariffs in April once the US Commerce Department delivers its report on why the US runs large trade deficits."

"Whatever today's news on tariffs, wide rate spreads justify EUR/USD continuing to trade near 1.03 and undermine the need for any corrective bounce. As our rate strategy colleagues discuss here, the decoupling of the eurozone from US rate spreads can see differentials stay wide, if not move wider over the coming months." 

"Combined with rising natural gas prices, expect EUR/USD to stay offered. A decline towards the 1.0250/60 range, or potentially lower, seems probable ahead of the new tariffs."