A currency war is coming folks- Trump will be watching the EUR/USD closely from now on

As the EUR/USD rises to fresh 2025 highs above 1.10, as just noted in the penultimate update, has this move got implications for the ECB policy going forward? Well, it could have because, as explained here yesterday, what often follows a trade war is a currency war. So, as the dollar feels the heat of all this right now that might not please the ECB. Probably the last thing they want to see right now is the Euro advancing further versus the dollar as that will make EU exports even more expensive for US consumers. So, how to combat then? Well its not on the radar at these levels, but if the EUR/USD takes out the 2024 high at 1.1214 (which is entirely possible) and advances towards 1.15 -1.20 the pressure on the ECB to cut rates, in order to try and combat that Euro strength will increase. On the other side of this agreement is the US president, who surely now wants to see the opposite play out, especially when it comes to the dollar versus the Chinese and Japanese currencies as well. The currency war is coming folks and right now the US is winning it seems as the dollar slides. The EUR/USD is right now at 1.1030