Forex Analysis & Reviews: 27.03.2025 - The Dollar Will Loosen Its...

Live Chat

InstaForex - Official partner of Dragon Racing

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

How to start trading

Useful information

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

PAMM System

ForexCopy System

Passive investments

OYS account

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Main Page

Partner Area

Advantages for Affiliates

Registration

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Contests

Events

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Forums

We are in social networks

Forex humour

Forex Portal

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

History

Why Choose Us

InstaSport

Regulation

Company News

Awards

InstaForex Stars

InstaForex Offline

Headquarters

Key documents

Social Responsibility

InstaForex Loprais Team - Official participant of the Dakar rally

27.03.2025 12:41 AM

The Dollar Will Loosen Its Grip

The euro is retreating cautiously, worried about a potential trade war between the European Union and the United States, while the dollar is on track for its worst month in over a year. Five consecutive days of EUR/USD declines have slightly improved the greenback's position, but the truth is hard to ignore—widespread disappointment with Donald Trump's policies is prompting traders to sell the dollar.

Speculators have become net sellers of the U.S. dollar for the first time since the November presidential election. Citigroup has lowered its forecast for the dollar over the next 6 and 12 months, and Credit Agricole also expects the USD index to fall. The bank admits it underestimated the impact of trade wars, public sector layoffs, and immigration restrictions on the U.S. economy. According to their outlook, the economy will cool faster than anticipated, providing a reason to buy EUR/USD.

Speculative positioning on the U.S. dollar

Before the 47th president's inauguration, markets were convinced that White House tariffs would hurt other economies more than the U.S. However, recent data suggests otherwise. Weak retail sales, consumer sentiment, and business activity in the U.S. point to a potential slowdown in GDP growth in Q1. Europe, by contrast, is benefiting from the front-loading of U.S. imports ahead of the tariffs and Germany's fiscal stimulus.

Rising European purchasing managers' indices, business climate indicators, and consumer confidence give EUR/USD a bullish tone. The U.S. tariff threat still looms over the eurozone, but it's a double-edged sword. Bank of France Governor Francois Villeroy de Galhau stated that the tragedy of Donald Trump's policy is its replacement of a win-win economic scenario with one where everyone ends up losing.

The more tariffs imposed, the higher the risk of a U.S. recession. The White House understands this, which is why there are growing rumors in the media about selective tariffs, delays in duties on car imports, semiconductors, and pharmaceuticals, and the possible exclusion of certain countries from the blacklist. No one knows what the outcome will look like.

Still, a large-scale U.S.–EU trade war remains the main risk factor for the EUR/USD uptrend. Germany's fiscal stimulus may cushion the blow to the eurozone economy but won't eliminate it. Meanwhile, the White House is preparing for tax cuts, which could support the U.S. dollar. There are many possible outcomes—traders must adjust their outlooks and positions accordingly.

On the daily EUR/USD chart, bears have pulled the pair away from its fair value at 1.0845. A break below the local low at 1.0775 could extend the decline. However, a rebound from 1.0715 would serve as a signal to buy.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.