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The euro ironed the $ 1,0608 in significant volatility, the dollar being penalized by the envisaged consequences of a large -scale trade war. Recall that customs duties up to 25% on import products from Canada and Mexico entered into force yesterday. Even if operators feed the hope that an agreement can be reached between Washington and its immediate neighbors.
“Many believe that they will be at least partially lightened (reduced rate and/or specific exemptions) in the coming weeks. As the evolution of the trade war progresses, investors will reassess their anticipations in terms of customs duties, which could cause persistent volatility of the markets”, analysis Joshua Jamner, senior analyst in investment strategy at Clearbridge Franklin Templeton).
The euro, for its part, was supported by the prospect of the abandonment of the budgetary “golden rule” in Germany, paving the way for investment expenditure in infrastructure and defense.
“The result of the German elections could lead to modest upward forecasts for the second half of 2025 and to new gains in 2026. In particular, rapid training of a CDU-SPD coalition would reduce uncertainty and trigger a pro-growth agenda with tax reductions, reforms of electricity prices and a stimulus for defense and infrastructure” Kukla, Senior Investment Officer at Indosuez Wealth Management.
The Conservatives (CDU/CSU) and the Social Democrats (SPD) announced that they had reached an agreement for the creation of an infrastructure fund of several hundred billion euros. In addition, the “golden rule” of the debt brake will be deeply modified, in particular to invest massively in the defense. Currently, this rule limits the federal budget deficit to 0.35%.
In the statistical chapter Wednesday, if the PMI services in final data for February hardly depart from the first estimates, at 50.6, production prices in the euro zone jumped 0.8% in the euro zone in monthly rhythm, exploding the target by 0.3%.
This second part of the week will also “work” in terms of American employment health, with the highlight on Friday the NFP (non -Farm Payrolls) report. To be continued at 2:30 p.m. this Thursday, weekly registrations for unemployment benefits, after the disappointment aroused yesterday by the conclusions of the investigation of the ADP.
It is in this context that a new BCE governors will end this Thursday.
“The” Bazooka “budgetary announcement of Germany that night, as well as the EU measurement package expected after the emergency summit of tomorrow, should stimulate economic growth and inflation, and limit the BCE’s room for maneuver in terms of interest rates reduction”, note the nomura economists, who no longer see rate reductions this year (including that of the day), 2.25 % by the middle of the year. “
Meet at 2:15 p.m. for the decision of monetary policy proper and at 2:45 pm for the press conference of C Lagarde. The main key rate is expected to decrease 25 base points, 2.90% to 2.65%.
The European Summit will also be at the heart of the Bover program this Thursday. The heads of state of the countries of the European Union must discuss military and financial aid in Ukraine in Brussels, the strengthening of the defense of the European Union and the geopolitical strategy. President E Macron addressed to the French yesterday, pleading for a massive rearmament.
At midday on the foreign exchange market, the euro was treated against $ 1.08 approximately.
Key graphics elements
The crossing in significant volatility of $ 1,0608 changes the situation on the configuration of the currency pair, which has just validated a resumption of support on a long mobile average, at 50 days (in orange), which begins a resource figure. The scenario of a fast melting towards the perfect parity (€ 1 = $ 1) is invalidated.
Medium term
In view of the key graphic factors that we have mentioned, our opinion is neutral in the medium term on Euro dollar parity (Eurusd).
We will keep this neutral opinion as long as the courses of Euro Dollar parity (EURUSD) are positioned between the support at 1,0608 USD and the resistance to 1,1012 USD.
The News Bulletin 247 Council
Daily data graphics
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