Lately, the U.S. Dollar has been getting stronger, and this has caught the attention of traders. A lot of this is due to traders watching for the impact of new tariffs, which are taxes on imported goods. Even though a recent report from the Dallas Federal Reserve showed some weakness in U.S. manufacturing, the Dollar is still rising. This suggests that many traders believe the U.S. economy will continue to do well, even with some challenges. If the Dollar keeps staying above certain levels, it could continue to climb higher.
In Europe, the Euro is facing some difficulties. The value of the Euro compared to the U.S. Dollar (EUR/USD) has been under pressure because inflation in Germany – one of the biggest economies in Europe – was lower than expected. This means that the cost of living in Germany isn't rising as fast as people thought it would, which can be a sign of slower economic growth. As a result, the EUR/USD exchange rate is hanging around the 1.0800 level, and traders are watching closely for any signs it might go lower. The main levels to watch for support are between 1.0760 and 1.0775.
The British Pound (GBP) is also facing some struggles. It dropped after a report showed that the number of new mortgages being issued in the UK didn’t meet expectations. This could be a sign that the UK housing market is slowing down. As a result, the GBP/USD exchange rate dropped to around 1.2900. This means that for every British Pound, you get fewer U.S. Dollars.
On the other hand, the Canadian Dollar (CAD) is being affected by the possibility of new tariffs between the U.S. and Canada. The value of the USD/CAD pair, which shows how many Canadian Dollars are needed to buy one U.S. Dollar, has been rising and is close to the 1.4400 level. This could mean that U.S. traders expect the Canadian Dollar to weaken, likely due to concerns over trade tensions and the tariffs.