EUR/USD hovers around 1.0750 with negative bias amid Trump trades
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EUR/USD may depreciate further as the US Dollar (USD) receives support from Trump trades. Republicans to gain significant authority to push through an expansive agenda focused on tax and spending cuts. The ECB may consider cutting rates to near zero by 2025 if Europe’s economic growth falters due to Trump’s tariffs. EUR/USD holds ground after depreciating around 2% in the previous session, trading near 1.0740 during the Asian session on Thursday. The downside risk for the EUR/USD pair seems possible as the US Dollar (USD) may receive support from Trump trades following the victory of Republicans in the US election. Donald Trump’s Republicans appeared poised to potentially take control of both chambers of Congress, granting them significant authority for the first time in eight years to push through an expansive agenda focused on tax and spending cuts, energy deregulation, and border security. According to Reuters, Republican lawmakers and aides indicated that early priorities would likely include extending Trump’s 2017 tax cuts, funding the US-Mexico border wall, cutting unspent funds allocated by Democrats, dismantling the Department of Education, and limiting the powers of agencies such as the Consumer Financial Protection Bureau. However, the US Dollar Index (DXY), which measures the value of the US Dollar against its six major peers, retreats from a four-month high of 105.44, recorded on Wednesday. The DXY trades around 104.90 amid a downward correction in US Treasury yields. US yields surged to their highest levels since July on Wednesday to 4.31% and 4.47%, respectively, on Wednesday. Traders anticipate the US Federal Reserve (Fed) will lower its benchmark interest rate by 25 basis points at its November meeting on Thursday. The CME FedWatch Tool indicates a 98.1% probability that the Fed will make this quarter-point rate cut in November, showing strong market consensus for a modest reduction…
Filed under: News - @ November 7, 2024 5:24 am