EURUSD rode a roller coaster

• The market is assessing the impact of tariffs.
• Gold risks entering a consolidation.

The US dollar rode a roller coaster as the Supreme Court cancelled old tariffs and the White House introduced new import duties. Investors are assessing the consequences of these steps for the currency market. MUFG believes that the failure of Donald Trump’s policy will prompt the US administration to weaken the greenback to aggressively boost exports. At the same time, lowering the average tariff rate from 16% to 13.7% will slow inflation and allow the Fed to resume its cycle of rate cuts.

Forex seems to disagree with the bank’s view. EURUSD quotes are falling as the cancellation of tariffs may revive the debate over American exceptionalism. For most of 2025, the US economy grew thanks to investments in artificial intelligence and the associated rise in productivity. Import duties held back this expansion, as American companies and households mostly paid them.

The removal of tariffs could be a form of fiscal stimulus and signal a return to American exceptionalism. This is good news for the US dollar. The White House may have introduced new import duties, but they could also be overturned just like the previous ones.

Support for the bears on EURUSD comes from Christopher Waller’s willingness to join the majority of FOMC officials who support a prolonged pause in the monetary expansion cycle. According to the governor, who voted for rate cuts at the last four Fed meetings, only a significant slowdown in employment in February would cause him to maintain a dovish stance in March.

The Fed’s passivity, coupled with expectations of positive developments in the US economy, provides grounds for EURUSD to continue its peak in the coming weeks. However, the medium-term outlook for the pair looks bullish. Derivatives indicate a 44% probability of three rate cuts by the Fed in 2026.

The strengthening of the US dollar caused gold to retreat after a four-day rally. The precious metal failed to hold the $5,200 per ounce mark as speculators took profits on long positions. The risks of Gold consolidation are growing amid still-high Treasury yields and a strong greenback on the one hand, and high uncertainty on the other.

The FxPro Analyst Team