- EUR/USD weakens to around 1.0900 in Wednesday’s Asian trading hours.
- Renewed USD demand weighs on the major pair.
- Traders will take more cues from the US February CPI inflation report, which is due later on Wednesday.
The EUR/USD pair attracts some sellers to near 1.0900, snapping the three-day winning streak during the Asian trading hours on Wednesday. The renewed US Dollar (USD) demand undermines the major pair. Later on Wednesday, the US February Consumer Price Index (CPI) inflation data will be in the spotlight.
The Greenback gains traction as US President Donald Trump’s steel and aluminum tariffs take effect on Wednesday. The White House confirmed that fresh 25% tariffs on all imported steel and aluminum will still go into effect on Wednesday, including against allies and top US suppliers Canada and Mexico.
Furthermore, the rising bets that the European Central Bank (ECB) will cut interest rates two times more by the summer could drag the shared currency lower against the USD. Traders had fully priced in two more rate reductions amid firm confidence that the Eurozone inflation will sustainably return to the 2% target this year.
On the other hand, probable US economic slowdown and trade policy uncertainty might weigh on the Greenback. Investors are worried about US weaker economic data as well as big cuts to the government workforce and government spending. Goldman Sachs analysts last week raised its recession chance from 15% to 20%, citing it saw policy changes as the key risk to the economy.
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