EUR/USD: Euro Struggles to Break $1.05 as Gloomy US Data Churns Forex Markets

Weaker-than-expected consumer confidence data shook the forex space Tuesday as the greenback regained some of its edge.

🚗 Euro at a Crossroads

• The EURUSD pair was seeking direction early Wednesday as traders were still digesting a closely watched economic report. February’s Consumer Confidence survey by the Conference Board, released Tuesday, showed that the mighty American consumer has been knocked down by looming doubts and fears.
• The reading came in at 98.3, well below expectations of 102.7 and deeply below January’s 105.3 figure. Anything under 100 indicates bad things for the economy, such as lack of growth and worries over spending.

👊 Dollar Making Moves

• In this light, the US dollar got a jolt to the downside with the euro-dollar briefly soaring above $1.05 with a Tuesday session high of $1.0520, which coincided with a previous peak from January 27 (double top maybe?). The first Wednesday deals saw the pair drift back under $1.05 with a session low of $1.0486.
• Donald Trump’s tariff hikes are stirring the forex landscape with traders anticipating trade wars and a whole bunch of complications for the currency space.

📣 What’s the Outlook?

• For one, escalating trade jitters have the potential to flare up inflation again after yearslong efforts from the Federal Reserve to stamp it out. In recent months, consumer prices have embarked on a journey to higher grounds. The trajectory could get even steeper once full-blown tariffs are introduced.
• Typically, tariffs are a way to make the local currency more competitive by hurting imports with an added tax charge. But what traders have seen happen to the US dollar so far has distorted their perception of what should happen — the buck has actually lost value.