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EUR/USD climbs above 1.0850 as the US Dollar underperforms ahead of the US NFP data release for February. US President Trump announced exemptions on more products imported from Canada and Mexico. German debt reforms have forced traders to pare ECB dovish bets. EUR/USD jumps above 1.0850 in Friday’s European session and revisits a four-month high. The major currency pair exhibits strength as the US Dollar (USD) weakens ahead of the United States (US) Nonfarm Payrolls (NFP) data for February, which will be published at 13:30 GMT. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, extends its losing streak for the fifth trading day and slumps to a four-month low of around 103.60. The Greenback has remained on the backfoot as investors have become increasingly concerned over the United States (US) economic outlook due to uncertainty over President Donald Trump’s tariff agenda. Market participants believe that the pressure of higher tariffs will be borne by US importers, who would pass on the impact to consumers. Such a scenario would diminish their purchasing power and, eventually, the domestic demand. On Thursday, Trump announced tariff relaxations on a number of products, which come under the purview of the United States-Mexico-Canada Agreement (USMCA) until April 2, the same day when he is expected to introduce reciprocal tariffs. The US President imposed 25% levies on Canada and Mexico on Tuesday but provided a one-month exemption on automobiles after discussing with the big three US carmakers on Wednesday. The US NFP report is expected to show that the economy added 160K fresh workers, higher than the 143K recorded in January. The Unemployment Rate is seen steady at 4%. Meanwhile, Average Hourly Earnings, a key measure of wage growth, is anticipated to have risen steadily by 4.1% year-on-year. Month-on-month wage growth…

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Filed under: News - @ March 7, 2025 11:25 am