EUR/USD: Reciprocal customs duties, the ‘poison’ of April?

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After the publication of the “PMIs” on Monday, the Euro / Dollar currency pair continued its lateralization movement, in a band defined by the 1.0758 and $ 1,1012.

These activity barometers, essential for trade, are calculated as a reminder after counting of investigations passed with a panel of purchasing directors, hence their predictive character. This morning was preliminary data for the current month. If the PMI of the Services came to 50.4, that of industrial activities beat the target, at 48.7, although still below the threshold of the 50 points which separates by construction, an expansion of a contraction of the sector considered.

Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, brought the following lighting: “coinciding with the arrival of spring, we observe signs of renewal in the manufacturing sector. If it is prudent does not overestimate the impact of a punctual result, it is however encouraging to note that production has increased for the first time since March 2023 and variable has straightened up for a third consecutive month. “

“This growth in manufacturers’ activity has also been accompanied by a clear slowdown in the folds of new orders and employment. If it can be argued that this improvement is explained by a temporary rebound in imports from the United States, linked to customs rights, the will of Europe to invest massively in defense and infrastructure – in Germany, an exceptional and historic budget was approved last week – supported in the coming months. “

At 50.2, the German component of services is however disappointing, the consensus stands at 52.3.

Bover also keeps an eye attentive to the date of April 02, and the entry into force, possibly, of new customs taxes at the entrance to American territory. And this on the principle of reciprocity. According to the Wall Street Journal, some sectors could be excluded from these customs surcharges.

“Appétit for risk has improved in the financial markets, following information that the US administration could be less aggressive than it was initially feared in the application of reciprocal customs tariffs, which attenuates fears of a catastrophe scenario for world trade,” said Ricardo Evangelista of Activtrades.

“I don’t change anything, but the word flexibility is an important word (…). There will be flexibility, but in principle, it is reciprocal,” Donald Trump told journalists on Friday. Enough to make a little force resume both in the dollar, the reference currency of world exchanges, and to the euro, the fine barometer of the appetite for the risk.

At midday on the foreign exchange market, the euro was treated against $ 1,0820 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 EURO Dollar parity prices (EURUSD) are positioned between the support at 1,0758 USD and the resistance to USD 1,1012.

Daily data graphics