Trump’s opening move failed. U.S. assets recorded their worst performance in the first 100 days of his presidency since Richard Nixon’s era. Yet, both the S&P 500 and the dollar are gradually recovering. Let’s discuss it and make a trading plan for EUR/USD.
The article covers the following subjects:
Major Takeaways
- The U.S. dollar lost 9% in Trump’s first 100 days.
- U.S. GDP risks contracting in the first quarter.
- Progress in trade talks is supporting the greenback.
- Strategies targeting a breakout of the $1.13–$1.14 range remain relevant for EUR/USD.
Weekly Fundamental Forecast for Dollar
What if the U.S. climbs out of the hole dug by White House policies with lower tariffs and a pile of trade agreements? What if its economy thrives after short-term pain? What if Donald Trump is a grandmaster who deliberately lost the opening to lull his opponent? All this would be a boon for the U.S. dollar, which is slowly becoming the currency of optimists, while the S&P 500 rally is making it harder for EUR/USD to rise.
The opening was indeed lost. The first 100 days of Trump’s presidency were the worst for U.S. assets since Richard Nixon in the 1970s. The S&P 500 dropped over 7%, and the USD index fell 9%. Companies rushed to front-load imports ahead of tariffs, pushing the U.S. trade deficit to a record $162 billion.
U.S. Foreign Trade Trends
Source: Bloomberg.
This has led Bloomberg experts to cut their first-quarter GDP forecast to 0.3% — the lowest since early 2022. It could get worse! The Atlanta Fed’s leading indicator signals a 1.5% contraction in the economy. Disappointing consumer confidence and job vacancy data point to further cooling.
However, things are often not what they appear to be. A lost opening might just be a clever gambit, sacrificing pieces for a stronger position. It’s not that Trump and his team have achieved nothing. Commodity prices have fallen, and the World Bank expects them to continue declining amid a slowing global economy and demand, coupled with increased supply. The organization lowered its global GDP forecast from 2.7% to 2.3% and predicts a 12% drop in commodity prices in 2025 and a 5% decline in 2026.
Asset Reactions to Trump’s First 100 Days
Source: Bloomberg.
If so, U.S. inflation might not accelerate, but instead slow down. What if Trump is right to criticize Jerome Powell for holding the federal funds rate steady while everything, from commodity prices to treasury yields, is falling? Markets, at least, are letting the president get away with it. His latest attacks on the Fed chair haven’t spooked stock investors.
Weekly Trading Plan for EURUSD
The S&P 500 rose thanks to softened car tariffs and Washington’s claims of progress in trade talks. Its rally allowed EUR/USD bears to repel the second assault on the $1.14 level. If the market doesn’t go where it’s expected, it’s more likely to move the other way. A test of support at $1.13 can’t be ruled out, but the strategy remains the same: shift from short-term selling to long-term buying.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of EURUSD in real time mode
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