BUZZ-COMMENT-ECB, data set the stage for lower EUR/USD as tariff decision looms
Jan 30 (Reuters) - EUR/USD traded near flat Thursday after the ECB and euro zone data presented downside risks for the pair, but investors are waiting for Feb. 1 to see whether U.S. President Trump imposes tariffs.
Euro zone Q4 GDP surprised to the downside coming in unchanged versus expectations of +0.1% growth and against Q3's +0.4% growth.
The report left the market considering the possibility that Europe's economic malaise could persist into 2025.
The ECB cut rates by 25bps as expected and indicated policy could be eased further due to economic growth concerns.
ECB President Christine Lagarde said policy is still in restrictive territory and that there hasn't been a discussion about the stopping point.
Lagarde also said growth risks remain tilted to the downside.
She also said frictions in global trade could weigh on euro area growth, which could put the focus on the potential for imminent tariffs.
Should tariffs be imposed on Europe the dollar's yield advantage over the euro would likely increase as Fed SRAM26 and ECB FEIZ5 terminal rate spreads and German-U.S. spreads US2DE2=RR widen.
EUR/USD may resume the down trend the pair has been in since peaking in September and make a run towards parity.
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