EUR/USD forecast: What now after Trump rules out military action in acquiring Greenland?

The markets breathed a sigh of relief during Trump’s speech marathon, where the US President ruled out the use of military to acquire Greenland. Up went stocks, and the dollar and down went the likes of the euro and franc. But does this mean it is risk back on, and markets will kick on from here after the recent falls? Well, time will tell. But caution remains the order of the day. After all, Trump will continue to weaponise his tariffs policy to get the same result. Military use would have been quite the unthinkable and no one really believed the US would have gone down that road anyway. Effectively, nothing new was said or changed, even if Trump’s tone was somewhat more conciliatory. Still, the threat of tariffs is there and a trade war with Europe cannot be ruled out just yet. This should keep risk appetite downbeat until there is more certainty about the future of Greenland and tariffs.

EU delays ratification of trade deal

Meanwhile, there’s in the latest twist in the US-EU tariff saga, the news coming out of Brussels will undoubtedly annoy Trump. The trade deal has been shelved after the European Parliament froze its ratification vote following Trump’s threats to seize Greenland. The Parliament’s trade committee has now pushed the vote back indefinitely, casting serious doubt on whether the agreement will ever see the light of day. The EU wants the US to “re-engage on a path of cooperation rather than confrontation.”

This comes after European leaders have been exploring possible retaliation measures after Trump threatened to impose tariffs on countries opposing his ambitions to acquire Greenland. European leaders appear to be hardening their stance.