EUR/USD Trades Cautiously As Focus Shifts To Trump’s Inauguration

EUR/USD trades with caution in a narrow range near the key level of 1.0300 in Friday’s European session. The major currency pair oscillates inside Thursday’s trading range, with investors focusing on United States (US) President-elect Donald Trump’s inauguration on Monday.Investors await Trump’s announcement of new economic policies for fresh cues about the United States (US) economic outlook and the likely global trade environment. Market experts believe that Trump’s policies will boost inflation and economic growth and lead to a global trade war.While testifying at a Senate Finance Committee on Wednesday, Trump’s treasury pick, Scott Bessent, said there is an urgent need to conclude the current tax regime to avoid the burden of a $4 trillion tax on the middle class. “If we do not renew and extend, then we will be facing an economic calamity,” Bessent said. He also supported Trump’s protectionist policies as they would help combat unfair trade practices and increase the US’s negotiating power.Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks higher and holds the key support of 109.00. The US Dollar remains broadly firm even though traders started pricing in at least one interest rate cut by the Federal Reserve (Fed) this year. Traders have raised Fed dovish bets as the core Consumer Price Index (CPI) – which excludes volatile food and energy prices – decelerated to 3.2% in December, the lowest level in over four years.More By This Author:USD/CHF Price Forecast: Ticks Lower Despite Upbeat US Dollar EUR/USD Trades Sideways As Trades Reassess Fed’s Monetary Policy Outlook EUR/USD Stays Firm Ahead Of US Inflation