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EURUSD:
The EUR/USD exchange rate fell below 1.0800 on Monday as market sentiment continued to deteriorate due to conflicting economic data and lingering concerns over tariffs. Investors experienced a degree of respite after US President Donald Trump indicated that the release of tariffs, which he himself had not previously imposed, is scheduled for 2 April. However, the results of the Purchasing Managers’ Index (PMI) survey continue to suggest that further challenges may lie ahead.
US President Donald Trump has once again made tariff threats, causing concern among investors. Investors have reacted positively to the suggestion that Donald Trump may be considering a tariff exemption for his own trade policy ‘strategy’, which has had a positive effect on market sentiment and has helped to keep the US Dollar in check.
Pan-European PMI data generally deteriorated in March, with the manufacturing PMI rising to 48.7 but still in contractionary territory. The services component fell to 50.4, while average forecasts had hoped for a rise to 51.0.
The US manufacturing PMI survey results for March fell faster than expected as the threat of tariffs dampened the outlook for physical production. The manufacturing PMI for March fell to a three-month low of 49.8, returning to contractionary territory as businesses express heightened concerns about the economic situation. In contrast, the services sector outperformed expectations, with the PMI rising to a three-month high of 54.3, as service providers anticipate being able to fully pass on rate hikes to consumers.
Mid-week economic data remains the market’s midpoint, but traders will be monitoring Friday’s upcoming US Personal Consumption Expenditure Price Index data.
Trading recommendation: SELL 1.0790, SL 1.0860, TP 1.0695
Origin: FreshForex
