Trump waives broad new Russia sanctions and tariffs under Graham Act, citing national interest
The recent decision by Trump to waive new sanctions and tariffs on Russia under the Graham Act reflects a significant pivot in the geopolitical landscape. By invoking national interest, this move aims to stabilize relations and mitigate potential economic repercussions, particularly for energy markets. The implications of this waiver might temper volatility in risk assets as traders reassess the broader implications for global trade and currency interactions, especially related to the Euro and the Dollar.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.075 (median across 8 firms), with Goldman at the upper bound (1.12) and BofA at the lower (1.04). CNBC’s report points towards a favorable shift for risk assets, aligning more closely with the upper forecasts, particularly from firms like JPMorgan and ING who see potential upside in the Euro against the Dollar.
How firms align
JPMorgan's target of 1.10 is well-aligned with the headline’s positive market sentiment, reflecting a more optimistic outlook on Euro strength. Conversely, BofA remains cautious with a more bearish target of 1.04, indicating concerns about sustained Euro gains in light of geopolitical risks. This divergence highlights the uncertainty surrounding near-term currency movements.
What the data shows
Current revisions appear to favor a modest recovery in the Euro, supported by the national interest waiver, but with caution on potential backlash from other political pressures. See more in our latest insights on regional FX trends at /research/euro-outlook.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Trump's sanction waiver could stabilize risk assets.
- 02FX traders may consider near-term Euro strength against the Dollar.
- 03Watch for shifts in market sentiment around geopolitical events.
- 04BofA's bearish outlook contrasts with JPMorgan's higher targets.
Market implications
Going forward, watch the EUR/USD pair approaching the 1.075 level—potentially testing higher resistance levels following the news. Events such as upcoming economic releases or further geopolitical developments could drive volatility ahead.
Risks to this view
If upcoming sanctions or geopolitical tensions resurface strongly against this waiver, it could invalidate the current bullish sentiment on the Euro and drive it back toward BofA’s lower target at 1.04.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.65
Sources & References
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