Tariff Uncertainty Weighs on Dollar as Global FX Reacts | 23rd February, 2026
Tariffs Pressure Dollar
Currency markets are reacting to renewed trade tensions as tariff uncertainty pressures the US Dollar and lifts major counterparts. Reports that the EU may freeze approval of a US trade deal, alongside China’s call for Washington to remove unilateral tariffs, have reignited concerns over global trade stability. The shifting tone has supported risk-sensitive currencies, with the Australian Dollar and Canadian Dollar advancing, while the Pound Sterling strengthens above 1.3500 amid broad-based USD softness. Markets are recalibrating expectations as geopolitical trade risks re-enter the spotlight.
EUR/USD Forecast
Current Price and Context
EUR/USD finds support as reports suggest the EU may freeze approval of a US trade deal amid renewed tariff threats. Trade uncertainty is weighing on the US Dollar, providing the Euro with a modest tailwind.
Key Drivers
Geopolitical Risks: Rising trade tensions between the US and EU boost demand for non-USD currencies.
US Economic Data: Softening USD sentiment offsets recent macro resilience.
EU Trade Policy: Potential freeze of trade deal approval signals diplomatic strain.
China-US Relations: Beijing’s call to lift unilateral tariffs adds to global uncertainty.
Monetary Policy: ECB-Fed divergence remains secondary to trade-driven flows.
Technical Outlook
Trend: Mild bullish recovery.
Resistance: 1.1880
Support: 1.1780
Forecast: Upside bias persists while tariff uncertainty pressures the Dollar.
Sentiment and Catalysts
Market Sentiment: Constructive on EUR.
Catalysts: Trade headlines, US macro data, yield spreads.
AUD/USD Forecast
Current Price and Context
AUD/USD extends gains as tariff uncertainty weighs on the US Dollar, supporting risk-sensitive currencies.
With tariff rhetoric resurfacing, FX markets are likely to remain sensitive to further trade-related headlines. Any escalation could deepen Dollar weakness and fuel gains in major and commodity-linked currencies, while signs of de-escalation may restore USD stability. As geopolitical uncertainty blends with macro positioning, volatility across currency markets may persist in the near term.
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