Feb 27 (Reuters) - Another round of tariff headlines was dictating the state of play for FX on Thursday after U.S. President Trump reiterated his threat to impose new levies next week, threatening the sanguine view that markets had adopted in recent sessions and threatening to keep EUR/USD rebounds shallow. While late on Wednesday’s session U.S. President Donald Trump said he will be announcing EU tariffs very soon, with levies on autos to be 25%, it was not until he renewed his threat during Thursday’s session that tariffs will go ahead for Canada and Mexico next week, alongside an additional 10% tariff on China, that this latest push lower in EUR/USD commenced. Markets were left to wonder whether this was posturing from the President or new tariffs will indeed arrive next week. If it were just posturing, and another delay for Canada and Mexico were granted, then the euro could bounce.

However, rebounds are likely to be shallow. Traders have been reluctant to chase gains above 1.05 and with trade uncertainty likely to persist heading into April, risks continue to point towards a deeper drop in the single currency.
EURUSD hourly chart

(Justin McQueen is a Reuters market analyst. The views expressed are his own.)