At 18:01 Lisbon time, the euro was trading at 1.0969 dollars, down from Thursday’s 1.1038 dollars, when it briefly reached 1.1111 dollars.
The European Central Bank (ECB) set the euro’s reference exchange rate at 1.1057 dollars.
The euro gained ground against the pound but lost value against the yen.
The new tariffs introduced by the Trump administration are expected to accelerate inflation and slow economic growth, with the Federal Reserve’s focus remaining on keeping price increases temporary, stated the Fed Chair Jerome Powell today.
In a written commentary, Powell noted that the tariffs and their economic and inflationary impacts are “significantly greater than expected.”
He also mentioned that import taxes are “highly likely” to lead to “at least a temporary increase in inflation,” but added that “it’s also possible that the effects could be more persistent.”
European, Asian, and American stock markets have seen significant drops over the past two days, with mounting concerns over the potential impact of the tariffs on global trade.
While losses on the stock exchanges were more subdued during the European opening, they increased sharply following the announcement that China plans to impose 34% tariffs on U.S. imports starting April 10, restrict exports of rare earth materials to the U.S., and sanction companies.
U.S. President Donald Trump announced on Wednesday a global base tariff of 10% on all countries he deems to be creating trade barriers to American products, with an additional tariff imposed on those he describes as the “worst offenders.”
A 20% tariff will be applied on all imports from the European Union, in addition to the existing 25% tariffs on the automotive, steel, and aluminum sectors.
