Forex – Euro Pares Gains after U.S. Tariff Announcement

© Reuters. Euro pares gains after U.S. tariff announcement – The euro pared back gains on Thursday as the U.S. imposed steel and aluminum tariffs on the European Union, Mexico and Canada, backing away from the highs of the day hit earlier amid easing concerns over the Italian political crisis.

was up 0.08% to 1.1672 by 10:35 AM ET (14:35 GMT), after rising as high as 1.1724 earlier.

U.S Commerce Secretary Wilbur Ross said Thursday that the U.S. was moving ahead with tariffs on from Canada, Mexico and the EU, ending a two-month exemption and potentially setting the stage for a trade war.

The ratcheting up of trade tensions offset optimism that the can be resolved before too long.

The single currency has rebounded after falling to ten-month lows of 1.1509 on Tuesday amid fears that repeat elections in Italy could give a mandate for the country to exit the euro zone.

Fresh attempts by Italy’s anti-establishment Five Star and Lega parties to revive their coalition plans raised hopes of a resolution, but investors remained cautious as political risk in the euro area remained elevated.

In Spain, Prime Minister Mariano Rajoy is facing a vote of no confidence in the government on Friday, which is likely to pass.

Investors were also wary amid ongoing concerns about a trade spat between the U.S. and China, as well the situation in .

The dollar was lower against the yen, with losing 0.35% to trade at 108.51, moving back towards Tuesday’s five month lows of 108.10 as risk aversion underpinned the Japanese currency.

The euro was also lower against the yen, with EUR/USD off 0.25% at 126.70 after climbing 1.04% on Wednesday.

The dollar dropped to five-week lows against the traditional safe haven Swiss franc, with falling 0.45% to 0.9845.

The pound pushed higher, with up 0.29% 1.3325 after hitting a six-month low of 1.3203 on Tuesday, pressured lower by political risk in the euro zone.

The , which measures the greenback’s strength against a basket of six major currencies, was down 0.10% to 93.96, down from Tuesday’s seven month highs of 94.98.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.