A note from Deutsche Bank analysts see them warning that a full-force implementation of the Trump administration’s economic agenda, without a counterbalancing response from Europe or China, could send the euro plunging against the U.S. dollar.
EUR/USD could fall below parity, potentially reaching 0.95 or even lower.
Under the most aggressive scenario, tariffs of 60% or more would be imposed on Chinese imports, phased in over three years, alongside 10% tariffs on imports from other countries, introduced within a year and reciprocated.
A more moderate approach, featuring 30% or higher tariffs on Chinese goods and trade restrictions on other nations phased in over two years, could see EUR/USD dip to 1.00. This level would match the dollar’s historical record highs but stop short of surpassing them.
The potential for such drastic currency moves underscores the global economic implications of unilateral trade policies and the importance of measured responses from major economies.
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If it hits parity we can have a parity party:
This article was written by Eamonn Sheridan at www.forexlive.com.
