The euro fell in European trade on Wednesday against a basket of major rivals, extending losses for the second straight session against the dollar and hitting a week trough, moving away from four-year highs on profit-taking.

Pressure on the dollar and US assets receded after President Trump’s assurances to the markets that he won’t fire Fed Chair Jerome Powell.

Now investors await important eurozone data later today, which would provide clues on the pace of growth in the second quarter, and the likely pace ahead of eurozone interest rate cuts.

The Price

The EUR/USD price fell 1% to $1.1307, the lowest in a week, with a session-high at $1.1425.

The pair closed down 0.8% on Tuesday, marking the first loss in three days on profit-taking away from a four-year high at $1.1573.

US Assets

US assets rebounded strongly on Tuesday with stock indices rallying and the dollar index rebounding from three-year lows after assurances from President Trump.

Trump’s Reassurances 

US President Donald Trump assured the markets he doesn’t intend to fire Fed Chair Jerome Powell despite his disappointment from the slow pace of policy easing.

Trump told reporters in the White House that he never tried to fire him, but he would like to see him more active about interest rate cuts.

It comes after a series of heavy Trump attacks against  Powell on social media, calling him a big loser and asserting his authority to fire him.

Potential Trade Deals

Markets were boosted as investors bet the US will reach trade deals with China and other trade partners in the near future.

US Treasury Secretary Bessent said he expects a de-escalation in the trade war with China in the very near future, calling the current confrontation “unsustainable”.

Lagarde 

ECB President Christine Lagarde is scheduled to speak to CNBC later today and discuss the latest developments in the eurozone and the US tariff crisis.

Last week, Lagarde said that tariffs represent a shock, but their impact on inflation remains unclear.

She said the picture might not become clear by the next policy meeting in June, as the 90-day pause on tariffs would still be in place by then.

European Rates

Reports showed that some ECB officials see a high probability of a rate cut in June.

Markets are pricing in a 60% chance of an ECB rate cut in June.

The Japanese yen fell in Asian trade on Wednesday against a basket of major rivals, extending losses for the second straight session against the dollar  and plumbing a week low, and backing off from seven-month highs on profit-taking.

It comes amid a strong recovery wave in the global markets as US President Donald Trump backs off his threats to fire Fed Chair Jerome Powell, restoring investor confidence. 

Recent remarks by US Treasury Secretary Scottt Bessent also boosted optimism about reaching trade agreements with major partners, including China, in the near future.

The Price

The USD/JPY price rose 1.2% today to 143.22 yen per dollar, a week high, with a session-high at 141.45.

The yen lost 0.5% on Tuesday against the dollar, marking the first loss in three days on profit-taking away from seven-month highs at 139.88.

Trump’s Reassurances 

US President Donald Trump assured the markets he doesn’t intend to fire Fed Chair Jerome Powell despite his disappointment from the slow pace of policy easing.

Trump told reporters in the White House that he never tried to fire him, but he would like to see him more active about interest rate cuts.

It comes after a series of heavy Trump attacks against  Powell on social media, calling him a big loser and asserting his authority to fire him.

Potential Trade Deals

Markets were boosted as investors bet the US will reach trade deals with China and other trade partners in the near future.

US Treasury Secretary Bessent said he expects a de-escalation in the trade war with China in the very near future, calling the current confrontation “unsustainable”.

Most cryptocurrencies rallied on Tuesday as the risk appetite improves and demand on bitcoin surges, with bitcoin passing the $90,000 barrier once more. 

The White House said nearly 18 countries already presented proposals for trade deals with the US.

White House Spokeswoman Caroline Levett said that work is being done to reach a trade deal with China despite there not being direct talks between Presidents Trump and Jinping.

US Treasury Secretary Scott Bessent said the trade war with China is currently unsustainable, expecting the situation to settle down soon.

The International Monetary Fund announced a major cut in its forecasted for global GDP growth in 2025, revising them downward to 2.8% from 3.3% in previous January forecasts, while cutting 2026 forecasts to 3.0% from 3.3%.

The IMF attributed the downgrade to the impact of the US tariffs, which disrupted global trade and supply chains.

The steep downgrade reflects the growing concerns about the ramifications of US trade policies, as major tensions flare with trade partners such as China and the EU, which could lead to an even slower worldwide growth.

The IMF cut US GDP growth forecast for 2025 from 2.7% to 1.8%, but still put a 40% chance of a US recession this year.

Ethereum

On trading, ethereum surged 8.5% on Coinmarketcap as of 18:54 GMT to $1706.

Gold prices lost ground on Tuesday as the dollar rallied against most major rivals, with the precious metal losing its haven appeal as concerns about the trade war calmed down.

The White House said nearly 18 countries already presented proposals for trade deals with the US.

White House Spokeswoman Caroline Levett said that work is being done to reach a trade deal with China despite there not being direct talks between Presidents Trump and Jinping.

US Treasury Secretary Scott Bessent said the trade war with China is currently unsustainable, expecting the situation to settle down soon.

The International Monetary Fund announced a major cut in its forecasted for global GDP growth in 2025, revising them downward to 2.8% from 3.3% in previous January forecasts, while cutting 2026 forecasts to 3.0% from 3.3%.

The IMF attributed the downgrade to the impact of the US tariffs, which disrupted global trade and supply chains.

The steep downgrade reflects the growing concerns about the ramifications of US trade policies, as major tensions flare with trade partners such as China and the EU, which could lead to an even slower worldwide growth.

The IMF cut US GDP growth forecast for 2025 from 2.7% to 1.8%, but still put a 40% chance of a US recession this year.

Otherwise, the dollar index rose 0.6% as of 18:33 GMT to 98.8, with a session-high at 98.8, and a low at 98.01.

On trading, gold spot prices fell 0.7% as of 18:34 GMT to $3401.4 an ounce.