EU Steelmakers Reject US Steel Tariffs, Limiting Euro to US Dollar (EUR/USD) Exchange Rate Movement
The US’s protectionist scheme has been met with fierce criticism by steel-producing countries across the globe, including EU-wide bodies.
Axel Eggert of Eurofer has highlighted the problems by saying;
‘Three years ago we were in a disastrous situation, where steel prices in [the space of] a few weeks decreased by up to 40%.
We could well come back to a similar situation if we have a straight deviation of steel from the US to the EU’.
Disruption to Eurozone exports could cause knock-on negative effects across the single currency bloc, an outcome that is undesired by Euro traders.
US Dollar to Euro Exchange Rate (EUR/USD) Tight over Steel Concerns and North Korea Meeting
The US Dollar to Euro (USD/EUR) exchange rate has been close today, with the USD only declining marginally.
This minor dip has been caused by growing concern about US plans to enact steel tariffs, as well as an apparent upcoming US-North Korea meeting.
In the former case, there are worries that President Donald Trump could do more economic harm than good with plans to penalise imports of steel into the US.
Some countries like Canada and Mexico are presumed to be exempt from the charges, but the situation elsewhere remains unclear.
Additional worries have been caused by the plan for direct meetings between Donald Trump and North Korean leader Kim Jong-un.
The hope is that these talks could reduced the risk of nuclear conflict in the future, as well as improve relations between the two opposing nations.
Even in these early days, however, South Korean mediators have stated that;
‘We have not seen nor received an official response from the North Korean regime regarding the North Korea-US summit’.
Some observers are worried that both national leaders could clash during the talks, in addition to more linear concerns about no agreement after the meetings.
Euro to US Dollar Exchange Rate Forecast: EUR/USD Volatility Risk on Jobs and Inflation Stats
This week’s Euro to US Dollar exchange rate movement may be dictated by USD movement more than anything else, given the limited Eurozone data releases.
The main events for Euro traders will be a speech from European Central Bank (ECB) President Mario Draghi on 14th March, as well as Eurozone jobs and production stats.
If Mr Draghi provides positive forward guidance on ECB monetary policy then the Euro to US Dollar exchange rate could improve on Wednesday.
However, if the Eurozone employment change readings fall and industrial production is reported to have dropped as expected then Euro gains may be limited.
The week’s other Eurozone data, covering wage growth and inflation rates, will be out on 16th March.
Economists aren’t predicting unified growth in Eurozone inflation rates, so even if wage growth rises the Euro could remain at the mercy of US Dollar movement.
As such, if US inflation growth is reported on 13th March, higher retail sales come on 14th March and consumer confidence rises on 16th March, the US Dollar could rise.