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Euro US Dollar (EUR/USD) Exchange Rate Muted as Trump Declares a ‘National Emergency’ on Telecoms

EUR/USD Exchange Rate Stable as Trump Blacklists Huawei

The Euro US Dollar (EUR/USD) exchange rate is rangebound this morning as markets react to the US move to effectively bar Huawei from doing business in the US.

At the time of writing the EUR/USD exchange rate is currently trading at $1.1210, virtually unchanged from this morning’s opening levels.

US Dollar (USD) Steady as Markets Rattled by US Telecoms Ban

The US Dollar (USD) is holding steady against the Euro (EUR) and the majority of its other peers this morning after markets were spooked as the US appeared to ratchet up the pressure on China.

This comes as Donald Trump called a national emergency, in an effort to protect US networks from ‘foreign adversaries’.

The move effectively bans US companies from using or selling equipment from a list of foreign telecoms firms, a list that unsurprisingly includes Chinese telecoms giant Huawei.

Wilbur Ross, US Commerce Secretary, said:

[The decision will] prevent American technology from being used by foreign owned entities in ways that potentially undermine U.S. national security or foreign policy interests.’

The blacklisting of Huawei will do little to smooth over trade relations with China, leaving investors to cling to their positions in the US Dollar for fear that US-China trade relations could deteriorate even further.

Euro (EUR) Exchange Rates Steady Following US Tariff Delay Bounce

At the same time, the Euro (EUR) is holding steady this morning as is failed to turn yesterday’s rebound into anything longer lasting.

The EUR/USD exchange rate bounced back from a one-week low on Wednesday following reports that Trump had decided to delay plans to impose tariffs on car imports by at least six-months.

This came as a major relief to the European auto industry and helped the Euro recoup its losses for the session.

However the single currency was unable to convert this into a more sustained rally, as concerns over Italy’s debt pile began to surface again after Italian Deputy Prime Minister Matteo Salvani said he would be willing to break the EU’s deficit targets if it would help employment in the country.

EUR/USD Exchange Rate Forecast: Rising Consumer Sentiment to Boost the US Dollar?

Looking ahead to the end of the week, movement in the Euro US Dollar (EUR/USD) exchange rate is likely to be driven by the release of the latest US consumer sentiment index.

Economists forecast that the index will show that household confidence in the US will have shown a slight improvement in May, potentially lifting the ‘Greenback’.

However, USD investors will also remain sensitive to any headlines regarding the the US-China trade dispute, with any major developments likely to overshadow the US sentiment figures.

Meanwhile, the Eurozone will publish last month’s final CPI reading tomorrow, which are expected to confirm that inflation in the bloc accelerated in April, but unlikely to lend much support to the Euro given that analysts expect the lift to be temporary.