Euro Falls to $1.13 against Dollar in FX Market
The euro fell near the $1.13 mark in the forex markets on Thursday following the U.S. move to slash tariffs on China’s exports by half. This market-related surprise development sent the U.S. dollar roaring across the board and pressured the euro after weeks of steady rally.
The greenback’s strength has eaten into the euro to the point where the old continent’s currency has lost about 2.3% from its valuation, or 270 pips, in the span of less than three trading sessions. On Monday, the euro hit a three-year high of $1.1572.
Analysts said Trump has been flip-flopping around market-moving issues, causing confusion in investors. This has caused the dollar to lose traction, though the greenback has started to recalibrate in the fx markets.
But hopes for easing trade tensions between the US and China were dampened after Bessent emphasized that no unilateral tariff reductions had been proposed and that formal negotiations had yet to commence.
Recently, US President Trump appeared to soften his stance toward China, while Beijing indicated a willingness for trade talks. The lack of concrete commitments has left markets in a state of wait-and-see, prompting a pullback in the yuan and a broader cooling of recent investor optimism.
Meanwhile, in China, the State Administration of Foreign Exchange committed to curbing excessive exchange rate fluctuations and preventing abnormal cross-border money flows.
On Thursday, US dollar and bond yields were steady after the United States de-escalated trade rhetoric that had weakened the greenback successively in the past weeks.
Elsewhere, China is preparing to lift sanctions on EU lawmakers to revive an investment deal with the EU. Christine Lagarde, European Central Bank President said tariffs are probably more disinflationary than they are inflationary for Europe.
At the press time, the offshore yuan dropped to around 7.29 per dollar on Thursday, reversing gains from the previous session, as investor sentiment turned cautious following remarks from US Treasury Secretary Scott Bessent.
It also vowed to enhance regulatory oversight, expand its policy toolkit, and correct pro-cyclical market behaviour. The euro-dollar breaking below $1.13 could open the door for a deeper pullback, especially if follow-through from Washington confirms the tariff rollback. MTN Nigeria Net Loss Grows by 192% to N400 billion
