07 Jan 2025

• EUR/USD rises as the US Dollar corrects downwards ahead of ISM Services PMI due later in the North American session.
• The US Dollar could receive some support after President-elect Trump stated that his tariff policy will not be scaled back.
• Traders await the preliminary Eurozone HICP inflation data for December scheduled to be released on Tuesday.

• EUR/USD maintains its upward momentum for the third consecutive session, hovering around 1.0400 during the Asian trading hours on Tuesday. This increase in the EUR/USD pair is primarily due to the weakened performance of the US Dollar (USD). Later today, the market anticipates the release of the US ISM Services Purchasing Managers Index (PMI). Additionally, on Wednesday, attention will shift to the Minutes from the Federal Reserve's (Fed) December policy meeting.
  
  The US Dollar Index (DXY), which measures the USD's strength against six major currencies, continues to face downward pressure for the third day in a row, trading close to 108.20 at the time of this report. Nevertheless, the Greenback may receive some support following President-elect Donald Trump's assertion that his tariff policy will remain intact.
  
  Trump dismissed a report from the Washington Post that indicated his administration was contemplating narrowing the focus of his tariff plan to include only certain essential imports. Traders are likely to monitor closely any developments regarding Trump's tariff approach.

  The Euro received a boost from the release of robust European inflation data on Monday. Germany's Consumer Price Index (CPI) increased to 2.6% in December, rising from 2.2% in November and exceeding the anticipated 2.4%. This figure represents the highest inflation rate in nearly a year and marks the third consecutive month of rising inflation in Germany.
  
  Furthermore, better-than-expected PMI data from Spain, Italy, France, Germany, and the Eurozone likely contributed to the Euro's strength. These reports bolstered expectations that the European Central Bank (ECB) would adopt a cautious approach regarding interest rate reductions, prompting traders to slightly temper their expectations for more aggressive easing measures.