Market players await United States data for additional clues. Progress in trade talks continues to benefit the American currency. EUR/USD pressures

Euro falls against dollar, with Trump's tariffs seen as slowing European growth

“Further euro strength is likely to be self-defeating,” said Valentin Marinov, a currency strategist at Crédit Agricole, a French bank. Exports were already likely to weaken and become a drag on the eurozone economy because of U.S. tariffs and European government policies that would encourage more imports.

The U.S. dollar was extending its bounce versus the euro for a second day on Tuesday, finding support on what currency strategists said appeared to be substantial short covering versus the euro following the U.

The FX market is now closely watching technical setups in EURUSD and USDCAD, both of which are approaching critical inflection points. The EURUSD pair has been on a sharp decline, now testing a long-standing descending channel on the 4-hour chart. This zone—around the 1.155 area—has previously acted as reliable support.

The short-covering recovery in the US dollar has been extended today, but the momentum stalled in the European morning. Click to read.

The pound briefly hit a two-year low versus the euro on Monday, before rebounding, and dipped on the dollar, though its moves were largely a function of those elsewhere as investors digested the announcement of an EU-U.