The euro hovered around $1.10, peaking on Thursday afternoon at 1.1150, close to its highest level since the summer of 2024, as the dollar remained weak and trade tensions intensified.

On Friday, China announced its intention to impose 34% tariffs on all US products from April 10, in retaliation for the drastic tariffs imposed by President Trump.

In Europe, French President Emmanuel Macron urged companies to suspend their US investments, while the European Commission said it was preparing its own countermeasures.

Trump's latest measure includes a 10% tariff on all imports, with significantly higher rates for some countries, including a 20% tax on EU products.

In response, markets have incorporated a 90%+ probability of a 25bp cut in ECB rates in April, with expectations of a 1.8% deposit rate cut by December, down from previous forecasts of 1.9% and the current 2.5%.