EUR/USD Outlook Hinges on Dollar's Safe-Haven Bid
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The dollar's role as a safe-haven asset is back in focus as trade tensions between the US and Canada threaten to disrupt one of the world's largest bilateral trading relationships. For EUR/USD, this matters immensely: periods of heightened trade-policy risk typically see capital rotate into dollar-denominated assets, creating headwinds for the single currency regardless of eurozone fundamentals.
Flat US stock futures on the news suggest markets haven't fully priced the potential fallout, meaning EUR/USD could see delayed but sharp reactions if negotiations deteriorate further. Traders should watch whether this dollar-supportive dynamic persists or fades as more details emerge on the scope of proposed tariffs and retaliatory measures.