Image Source: Pixabay

• EUR/USD edges lower to 1.0425 in Wednesday’s late American session.
• FOMC Minutes indicated that the Fed wants to take time before making adjustments to interest rates.
• The fresh round of Trump’s tariff threats weighs on the Euro. 

The EUR/USD pair weakens to near 1.0425 during the late American session on Wednesday. Tariff concerns from US President Donald Trump and geopolitical tension provide some support to the US Dollar (USD). Investors await the US weekly Initial Jobless Claims, the CB Leading Economic Index and the Philly Fed Manufacturing Index reports, which are due later on Thursday. 

The minutes from the FOMC meeting released on Wednesday stated that it was appropriate to keep the target interest rate unchanged at the January meeting, adding that the Fed believes that it is well positioned to take time to assess the outlook for economic activity, the labor market and inflation. Fed policymakers agreed that inflation must show clear signs of slowing down before any further rate reductions can be made. 

The Federal Reserve’s (Fed) Austan Goolsbee, Michael Barr and Alberto Musalem are set to speak on Thursday. Their remarks could offer some hints about the path ahead for US interest rates. Any hawkish comments from Fed policymakers could boost the Greenback in the near term.

The latest round of tariff threats lifts the Greenback and creates a headwind for EUR/USD. Trump has criticized the EU’s car tariffs and threatened reciprocal tariffs on various sectors. Late Tuesday, Trump said that he intends to impose auto tariffs "in the neighborhood of 25%" and similar duties on semiconductors and pharmaceutical imports.

More By This Author: