EUR/USD and USD/JPY Analysis: Market Stabilizes Amid Trade Tensions
EUR/USD and USD/JPY Analysis: Market Stabilizes Amid Trade Tensions
After a period of significant selling since Friday, both EUR/USD and USD/JPY have shown signs of stabilization during the Asian session on Tuesday.
Ongoing trade tensions, particularly between the U.S. and China, continue to influence market dynamics.
The EUR/USD pair has experienced a decline, with the euro swap rate dropping to -5.375%, the lowest since November 2023, reflecting heightened demand for dollar liquidity.
The European Central Bank is concluding a two-day policy meeting on Thursday, with markets expecting a sixth consecutive 25 basis points rate cut, bringing the benchmark to 2.5%.
The Japanese yen has strengthened due to increased demand for safe-haven assets amid global economic uncertainties.
Expectations are that the Bank of Japan will continue to raise interest rates, supported by positive outcomes from Japan's spring wage negotiations.
Market participants are closely monitoring U.S. trade policies under President Donald Trump, especially regarding tariffs, as these significantly impact currency valuations.
Upcoming economic data, including U.S. labor market statistics, will provide further insights into market direction.
