EUR/USD holds below 1.0950, hopes of German fiscal deal might help limit its losses

• EUR/USD posts modest losses near 1.0915 in Tuesday's early Asian session. 
• German spending plan and softer US Dollar might support the major pair. 
• US Retail Sales came in weaker than expected in February. 

The EUR/USD pair trades with mild losses around 1.0915 during the early Asian session on Tuesday. Escalating trade war with further tariffs from US President Donald Trump on European Union goods weighs on the Euro (EUR). However, the weaker US Dollar (USD) amid the concerns over the economic slowdown in the United States and the hopes of the German fiscal deal might cap the downside for the major pair. 

The US has imposed tariffs on steel and aluminium, the EU has set out plans for retaliation, and Trump has vowed a 200% retaliatory tariff on European wine and spirits. Any signs of an escalating tariff war between the US and EU could exert some selling pressure on the EUR. 

On the other hand, the downside for EUR/USD might be limited as the Greens' signal to the German debt restructuring deal. German Chancellor-in-waiting Friedrich Merz agreed to set up a 500 billion Euro infrastructure fund and dramatic changes in the borrowing rules or stretch in the so-called 'debt brake'. This should ensure the package's approval in the lower house of Germany's parliament on Tuesday and by the upper house on Friday. This, in turn, might boost the shared currency against the US Dollar (USD) in the near term.

Furthermore, the weaker-than-expected US Retail Sales added to concerns about a slowdown in consumer spending. This report might weigh on the Greenback and act as a tailwind for the major pair. Retail Sales in the United States rose 0.2% MoM in February, compared to a fall of 1.2% (revised from -0.9%) in January, the US Census Bureau reported on Monday. This figure came in weaker than the market expectation for an increase of 0.7%. On a yearly basis, Retail Sales climbed 3.1% versus 3.9% (revised from 4.2%) prior.