empty
18.04.2025 03:39 AM
The Dollar Undid Everything Itself

He meant well, but it turned out the usual way. Donald Trump firmly believes that tariffs can replace income tax, generate massive revenue for the budget, and bring about a new golden age. However, even American companies that manufacture and sell goods within the U.S. risk taking a hit. Packaging may come from China, and finding new suppliers takes time. As a result, EUR/USD bears remain under pressure despite attempts to counterattack.

Trump still has a soft spot for U.S. stocks. Their recent decline followed the hawkish rhetoric of Jerome Powell. The Federal Reserve Chair blamed the White House's largest tariff hikes since the 1930s for potentially accelerating inflation and worsening labor market conditions. In response, Trump called him someone who makes responsible decisions too late and demanded an immediate rate cut.

USD Index and Economic Policy Uncertainty Trends

This image is no longer relevant

Rumors are circulating in the media that Jerome Powell might be next if the White House has already managed to remove senior officials. Could Trump pull off the impossible? That would be bad news for markets and the dollar. U.S. assets are already suffering from a loss of investor confidence. This trend could worsen if the market begins to doubt the independence of the Fed.

The U.S. President can only envy the European Central Bank, which just cut the deposit rate for the seventh time during the current monetary easing cycle—from 2.5% to 2.25%. Interestingly, the accompanying statement no longer included the phrase "policy remains restrictive." Could this mean that Governing Council members believe the easing cycle is coming to an end? If so, it might lend some support to EUR/USD.

In practice, halting monetary expansion could deprive European equities of key support. Capital may no longer flow from North America to Europe as quickly, and EUR/USD bears could launch another counterattack. The music may not play much longer on their street: the risk of the U.S. dollar falling into negative territory suggests that the dollar's best days could be behind it.

U.S. Dollar Reversal Risk Dynamics

This image is no longer relevant

This image is no longer relevant

Only Trump might be able to save it. But the Republican cannot abandon the tariff policy now—he's gone too far. There's no turning back. The only hope lies in progress in trade negotiations between the U.S. and other countries, especially Japan. If Tokyo can't reach an agreement with Washington, no one will.

Technically, on the daily EUR/USD chart, a 1-2-3 reversal pattern may be forming. However, to activate it, the price must fall below the local low at point 2, corresponding to the 1.129 level. If that happens, the chances of a pullback will increase; if not, it's best to stick with the current buying strategy.

Marek Petkovich,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/CHF. Analysis and Forecast

Today, the USD/CHF pair continues to remain under pressure for the second day in a row, having dropped to the key psychological level of 0.8100 and updated its weekly

Irina Yanina 18:25 2025-06-24 UTC+2

The Whole World is a Stage, and Countries Are Its Actors... (A Limited Decline in Gold and a Rise in Bitcoin Are Possible)

Iran responded to the U.S. with a strike on an American military base in Qatar, thereby demonstrating its resolve for retaliation and confrontation. Markets reacted in a rather peculiar

Pati Gani 09:25 2025-06-24 UTC+2

The Market Has Moved On From the War

Does Iran want war? Judging by the symbolic attack on American bases in Qatar, Tehran does not appear eager to enter into an armed conflict with Washington — which

Marek Petkovich 07:19 2025-06-24 UTC+2

What to Pay Attention to on June 24? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic reports are scheduled for Tuesday, and none are of significant importance. Essentially, the only one worth mentioning is the German Business Climate Index —

Paolo Greco 07:19 2025-06-24 UTC+2

GBP/USD Overview – June 24: No Confirmation of Destruction

The GBP/USD currency pair also traded relatively calmly on Monday. While there were some price "swings," many traders and analysts had expected a much more significant move. The dollar strengthened

Paolo Greco 03:45 2025-06-24 UTC+2

EUR/USD Overview – June 24: Iran Exits Talks and Launches a Retaliatory Strike

The EUR/USD currency pair traded extremely calmly on Monday, considering the intense fundamental backdrop that developed over the weekend. Recall that over the weekend, Donald Trump once again "changed

Paolo Greco 03:45 2025-06-24 UTC+2

Trump Keeps Hitting a Wall

There's a saying: "An irresistible force meets an immovable object." It describes an irreconcilable standoff where neither side is willing to compromise. In my view, Trump's "scythe," with which

Chin Zhao 00:12 2025-06-24 UTC+2

Should We Expect De-escalation in the Middle East?

The market has absorbed the news of U.S. strikes on Iran's nuclear facilities quite resiliently. Why did this happen, and why was the reaction relatively muted? These questions are unlikely

Chin Zhao 00:12 2025-06-24 UTC+2

What Will Powell Say?

Starting June 24, Fed Chair Jerome Powell will address Congress over two days, delivering the semiannual monetary policy report. On Tuesday, he will speak before the Senate Banking Committee

Irina Manzenko 00:12 2025-06-24 UTC+2

The Euro Gets a Knife in the Back

Trouble never comes alone. European industry is beginning to lose steam after rapid growth driven by a front-loaded surge in U.S. imports. The euro area is a net oil importer

Marek Petkovich 00:11 2025-06-24 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.