EUR, USD flows: EUR falls as Trump proposes 50% tariff

Equities have been sold off and riskier currencies have fallen on news that Trump said on Friday that he is recommending a straight 50% tariff on goods from the European Union starting on June 1, saying the EU has been hard to deal with on trade. The gains in EUR/USD that had been seen earlier have been reversed, but EUR/USD is unchanged on the day, while GBP and the JPY have gained ground against the EUR. Most will assume that these tariffs are unlikely to actually be imposed, or if they are they won’t last for long, judging by what has happened with China, but for now this is likely to weigh on the EUR on the crosses, particularly against the JPY.