EUR/USD holds losses near 1.1400 ahead of Eurozone HICP inflation data

• EUR/USD depreciates as the US Dollar (USD) recovers its losses on technical correction.
• European Union warned that Trump's new plan to double US tariffs on steel and aluminium could derail bilateral trade negotiations.
• US ISM Manufacturing PMI fell to 48.5 in May from 48.7 in April.

EUR/USD edges lower after registering over 0.50% gains in the previous session, trading around 1.1420 during the Asian hours on Tuesday. The US Dollar (USD) recovers its ground on technical correction, despite growing concerns regarding stagflation in the United States (US).

US President Donald Trump threatened on Friday to double import tariffs on steel and aluminium, effective on Wednesday, to build up pressure on global steel producers and intensify the trade war. "We are going to be imposing a 25% increase. We're going to bring it from 25% to 50% - the tariffs on steel into the United States of America, which will even further secure the steel industry in the United States," he said, per Reuters.

Moreover, the US Dollar attracted sellers after the closely watched Institute for Supply Management (ISM) Manufacturing Purchasing Managers' Index survey of the manufacturing sector signalled a third monthly decline in output in a row. The index eased to 48.5 in May from 48.7 in April. This figure came in weaker than the expectation of 49.5.

The European Union (EU) expressed "strong" regrets over Trump's plan to double US tariffs on steel and aluminium, which could derail bilateral trade negotiations. The European Commission (EC) said on Saturday that Trump's tariffs decision "undermines ongoing efforts" to reach a deal, warning about "countermeasures", per BBC.

Traders will likely observe Eurozone Harmonized Index of Consumer Prices (HICP) data scheduled to be released on Tuesday. Focus will shift toward the release of the JOLTS Job Openings later in the North American session.