Select Language

EUR/USD reclaims 1.14 as US data, trade tensions weigh on US Dollar

Breaking news

EUR/USD reclaims 1.14 as US data, trade tensions weigh on US Dollar

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
update 2025.06.05 03:46
EUR/USD reclaims 1.14 as US data, trade tensions weigh on US Dollar

update 2025.06.05 03:46

  • EUR/USD climbs over 0.50% as US services sector contracts, private hiring disappoints.
  • Trump doubles tariffs on steel and aluminum; markets await Xi call for US-China clarity.
  • Mixed Eurozone PMIs and soft inflation may justify ECB rate cut at Thursday's meeting.

The EUR/USD advances on Wednesday, edging up over 0.50% as the Greenback erases Tuesday's gains following the release of weaker-than-expected economic data from the United States (US). This, along with uncertainty fueled by the trade war, pushed the pair past the 1.1400 figure after hitting a daily low of 1.1356.

Late on Tuesday, US President Donald Trump signed an executive order that doubled steel and aluminum tariffs from 25% to 50%, effective June 4, for most countries, except the UK, which remains at 25%. In the meantime, traders brace for Trump's call with Chinese President Xi Jinping later this week, according to the White House.

US data revealed that business activity in the services sector is slowing, according to the Institute for Supply Management (ISM). Earlier, ADP reported that private companies hired fewer people than projected in May, which disappointed investors and could be a prelude to a soft Nonfarm Payrolls report on Friday.

In the Eurozone, HCOB Services and Composite Purchasing Managers Indexes (PMIs) showed mixed results, with some measures expanding while the majority remained in contraction territory. This, along with last Tuesday's inflation report in the bloc, could justify the European Central Bank (ECB) lowering rates by 25 basis points (bps) at the June 5 meeting.

The EU economic docket will report inflation figures on the producer side, along with the ECB's decision and President Christine Lagarde's press conference. Across the pond, the US schedule will feature Initial Jobless Claims for the last week and speeches by Federal Reserve (Fed) officials.

Euro PRICE This week

The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the US Dollar.

USD EUR GBP JPY CAD AUD NZD CHF
USD -0.64% -0.69% -0.73% -0.52% -0.98% -1.15% -0.67%
EUR 0.64% -0.06% -0.08% 0.11% -0.34% -0.54% -0.04%
GBP 0.69% 0.06% 0.00% 0.17% -0.28% -0.48% 0.02%
JPY 0.73% 0.08% 0.00% 0.20% -0.27% -0.44% -0.04%
CAD 0.52% -0.11% -0.17% -0.20% -0.46% -0.65% -0.15%
AUD 0.98% 0.34% 0.28% 0.27% 0.46% -0.14% 0.39%
NZD 1.15% 0.54% 0.48% 0.44% 0.65% 0.14% 0.51%
CHF 0.67% 0.04% -0.02% 0.04% 0.15% -0.39% -0.51%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

EUR/USD daily market movers: Euro boosted ahead ECB's monetary policy

  • EUR/USD uptrend remains intact, but it is responding to US and Eurozone economic data during the week.
  • US ADP National Employment Change in May rose by just 37K, missing forecasts of 110K and down from April's revised 60K, indicating weak private hiring. 
  • The US ISM Services PMI fell to 49.9 in May from 51.6, below the expected 52.0, signaling contraction in the services sector.
  • The EU HCOB Services PMI improved in May, from 48.9 to 49.7, exceeding estimates for an unchanged figure. The Composite PMI expanded from 49.5 to 50.2, suggesting that overall business activity seems to be gathering steam.
  • Financial market players have fully priced in the expectation that the ECB will reduce its Deposit Facility Rate by 25 basis points (bps) to 2% at the upcoming monetary policy meeting.

Euro technical outlook: EUR/USD cracks below 1.1400, bears eye 1.1300

The EUR/USD is upwardly biased, but so far failure to crack the weekly high of 1.1454 reached on June 3 paves the way for a pullback before the uptrend resumes. It should be said the pair hit a lower low during the current session, which means that a daily close below 1.14 could set the stage for a test of 1.13.

If EUR/USD clears 1.1454, the next resistance is 1.1500. Further gains lie overhead, with the next ceiling level seen at April highs of 1.1572, ahead of 1.16.

Conversely, If EUR/USD falls below the June 2 daily low of 1.1344, a move to 1.13 is on the cards. A breach of the latter would expose the 20-day Simple Moving Average (SMA) at 1.1284, followed by the 50-day SMA at 1.1218 and 1.1200.

Euro FAQs

The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB's primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates - or the expectation of higher rates - will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB's 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone's economy.

Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.


Date

Created

 : 2025.06.05

Update

Last updated

 : 2025.06.05

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Silver Price Forecast: XAG/USD dips below $36.20 after bearish reversal, US yields rebound

 Silver price sinks more than 1% on Friday, ahead of the weekend, after refreshing five-day highs of $36.83, ahead of $37.00. At the time of writing, XAG/USD trades at $36.16 due to a slight recovery in the US dollar and rising US Treasury yields.
New
update2025.06.28 05:57

Canadian Dollar snaps lower after Trump pulls the plug on trade talks with Canada

The Canadian Dollar (CAD) backslid on Friday, falling back on a combination of weakening Canadian Gross Domestic Product (GDP) growth metrics and fresh trade tensions with US President Donald Trump.
New
update2025.06.28 05:43

EUR/USD slips below 1.1700 as core PCE tops estimates, Eurozone data mixed

The EUR/USD retreats from yearly highs above 1.1750, tumbling below 1.1700 despite market participants being convinced that the Federal Reserve (Fed) will cut rates at the September meeting.
New
update2025.06.28 05:39

AUD/USD retreats from YTD highs as risk sentiment steadies, US Dollar firms

The Australian Dollar (AUD) is pulling back from weekly highs against the US Dollar (USD) on Friday.
New
update2025.06.28 04:37

Dow Jones Industrial Average accelerates into the high end as interest rate cut bets climb

The Dow Jones Industrial Average (DJIA) gained ground on Friday, driven by a combination of investor expectations that the US will figure out how to secure trade deals that circumvent its own ringfence of threatened tariffs, and rising expectations of more rate cuts from the Federal Reserve (Fed) by
New
update2025.06.28 03:50

NZD/USD holds below YTD peak, capped in rising wedge pattern

NZD/USD struggles to extend its recent advance on Friday, hovering near 0.6045 after an intraday high of 0.6079. The pair remains trapped inside a rising wedge formation, typically a bearish signal, as the broadly weak US Dollar steadies.
New
update2025.06.28 03:23

WTI Crude Oil posts largest weekly drop since March 2023

West Texas Intermediate (WTI) Crude Oil has fallen sharply since reaching a high of $76.44 on Monday, with prices declining more than $10.00 per barrel this week.
New
update2025.06.28 03:19

Gold plunges below $3,300 as risk appetite surges on China trade deal, Middle East diplomacy

Gold price tumbled over 1.50% on Friday amid an improvement in risk appetite, driven by several factors.
New
update2025.06.28 02:40

EUR/USD hits multi-year highs as USD struggles despite hotter PCE print

The Euro (EUR) climbs for an eighth consecutive day against the US Dollar (USD) on Friday, as the Greenback remains under pressure amid a combination of political and economic headwinds.
New
update2025.06.28 01:44

Tensions on the Copper market - Commerzbank

According to the International Copper Study Group, the Copper market slipped from a supply surplus to a supply deficit of 50 thousand tons in April, Commerzbank's Head of FX and Commodity Research Thu Lan Nguyen notes.
New
update2025.06.28 01:34

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel