Euro Steady Amid Global Trade Tensions Over U.S. Tariffs

The euro rose slightly after a period of volatility, as the U.S. prepares to impose a 25% tariff on imported cars, potentially affecting global trade relations. Markets remained uncertain, focusing on automakers' stock fluctuations while assessing the tariffs' impacts on growth and inflation.

The European currency gained some ground after touching a three-week low, as market participants nervously eyed the upcoming U.S. tariffs on imported vehicles. President Donald Trump's decision to enforce a 25% tariff has stirred global trade concerns, with potential repercussions on various international partnerships.

Market movements were largely muted amidst the tariff tension, despite mild fluctuations in the currency exchange rates. The euro stabilized at $1.0765, while the yen and the Mexican peso weakened slightly against the dollar. Meanwhile, automotive import data revealed that the U.S. acquired $474 billion worth of automotive products in 2024, spotlighting Mexico, Japan, South Korea, Canada, and Germany as major suppliers.

Investors continue to speculate over the potential economic impacts of the tariffs, with some experts forecasting decreased U.S. growth and increased inflation rates. European officials brace for the imposition of 20% tariffs, as trade negotiations remain ongoing. Analysts also highlighted the possible negative repercussions for the dollar if these tariffs remain in place.

(With inputs from agencies.)