EUR/USD: How high will Trump set import tariffs?

Today at 20:00 (EU Time), Donald Trump will hold a press conference at the White House, which could go down in history as a milestone in the globalisation of trade. The American president, who has consistently alternated between brutal verbal outbursts, threats, and retreats on tariffs, is expected to reveal precisely which tariffs are applied to which countries and products, and under what conditions.

The American president, who refers to today as "Liberation Day," is intended to mark the beginning of a trade policy that, according to him, favours American workers and products. Peter Navarro, Donald Trump's trade and industry advisor, has indicated that these tariffs could generate $665 billion in revenue annually.

"Today, numerous tariffs are expected to be announced, but everything remains uncertain: their magnitude, timing, and disparities across countries. Estimates of the average tariff rate range from a few percentage points to double-digit levels in the most pessimistic scenarios," say Oliver Blackbourn, portfolio manager, and Adam Hetts, global head of multi-asset investments at Janus Henderson.

"It is also unclear whether the tariffs will serve as leverage in a broader negotiation strategy. What seems less uncertain is their overall negative impact on economic growth, consumers, and markets," they add.

And it is precisely this fear of "losing everything" that, regardless of the brutality of the announced measures, will weigh on both the dollar, the historical currency of global trade, and the euro, a fine barometer of risk appetite in financial markets. Even if Donald Trump has promised to be "very kind".

In terms of statistics, traders yesterday learned of the final Eurozone manufacturing PMI data, which came in at 48.5 points, very close to initial estimates.

Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, provided the following insight: "While the PMI index recovered in Germany and France, the two largest economies in the Eurozone, it declined in Italy, while it remained below the 50.0 mark (unchanged) for a second consecutive month in Spain after remaining at a relatively high level for a long time. We can hope that fiscal spending will increase significantly in Germany, and that this increase will also benefit other countries in the region, thus stimulating growth throughout the Eurozone. These speculations are not unjustified, but we will likely have to wait until 2026, or even later, to feel the first effects of these new fiscal policies."

Furthermore, the very first estimates of retail price inflation in the Eurozone, excluding volatile items, came in at +2.3% year-on-year for March, versus the 2.2% forecast.

"With stable growth in consumer goods, this brought some relief to the core rate, which rose by only 2.4% in March. The European Central Bank will welcome this development, as further easing in service prices is a key assumption for achieving its 2% inflation target," comments Ulrike Kastens, Senior Economist at DWS Europe.

This week, don't forget: Friday's publication of the federal report on the health of private sector employment in March, the volatility-inducing NFP, or Non-Farm Payrolls.

Right now, the EUR/USD is trading at $1.0811.

KEY GRAPHIC ELEMENTS
The breakout of $1.0608 amid significant volatility changes the situation for the currency pair, which has just validated a resumption of support on the long-term 50-day moving average (in orange), which is initiating a resource pattern. The scenario of a rapid decline towards perfect parity (?1 = $1) is invalidated. This consolidation is entering its final phase upon contact with the 20-day moving average (in dark blue), against a backdrop of tightening Bollinger Bands.

MEDIUM-TERM FORECAST
In light of the key chart factors we have mentioned, our opinion is neutral in the medium term on the EUR/USD.

We will maintain this neutral opinion as long as the EUR/USD is positioned between the support at $1.0758 and the resistance at $1.1012.