Forex analytics. The dollar has been waiting for the promised three years
Storms don’t last indefinitely. The markets are gradually recovering from the upheaval caused by the cancellation of tariffs by the Supreme Court. The White House has introduced new 10% import duties. Donald Trump is threatening to raise them, and the US administration has launched numerous investigations to make the fees long-lasting. Nevertheless, if the global economy survived America’s Liberation Day, why couldn’t it cope with a lesser threat?
According to Bloomberg estimates, the average effective tariff rate will fall from 13.6% to 10.2%, which will loosen the noose around the neck of the American consumer. It is from his pocket that up to 90% of tariffs are paid, according to research by the Federal Reserve Bank of New York.
Due to the shutdown and import duties, the US economy slowed from 2.4% to 2.2% in 2025. The indicator is the worst since 2022. He is hardly talking about the new Golden Age of America that Donald Trump promised. If it weren’t for the productivity gains from artificial intelligence and the huge investments associated with AI, it would have been even worse.
However, are new technologies a bullish factor for the economy? Or “bearish”? Or is artificial intelligence so bullish that it will eventually turn out to be bearish? According to FOMC Governor Lisa Cook, the Fed is unable to withstand the impact of AI on the labor market. Mass layoffs due to increased productivity may eventually turn into a recession. History shows that recessions come after serious rises in unemployment.
Against this background, derivatives are changing their perspective on the path of the Fed’s monetary policy. If earlier the futures market predicted an increase in the federal funds rate in 2027, now it believes that the cycle of monetary expansion will continue.
If this is the case, the EURUSD uptrend risks recovering in a few weeks. Another thing is that the euro is still under pressure and continues to react to external factors.
Thus, ING believes that every $5 increase in the price of Brent leads to a weakening of the main currency pair by 1%. If the armed conflict in the Middle East throws the North Sea variety to $85 and above, the EURUSD will return to 1.14.
The US dollar is supported by hawkish comments from Presidents of the Federal Reserve Bank of Chicago, Austan Goolsbee, and the Federal Reserve Bank of Boston, Susan Collins, indicating the need to keep the federal funds rate at the current high level for a long time.
