• EUR/USD declines to near 1.0600 as investors expect that Trump’s protectionist policies will significantly weigh on the Eurozone export sector.
• The ECB is expected to cut interest rates by 50 bps in December.
• Investors shift their focus to the US inflation data for October.

EUR/USD tumbles to near Year-To-Date (YTD) low of 1.0600 in Tuesday’s North American session. The major currency pair continues to face intense selling pressure on heightened concerns over the Eurozone export sector outlook, given that President-elect Donald Trump vowed to raise import tariffs by 10% in his election campaign. 

Market experts believe that Trump’s landslide victory is favorable for consumer confidence and business sentiment in the United States (US) but is worrisome for their leading trading partners. Trump's protectionist policies could also lead to a vicious cycle of global trade war, especially with the Eurozone, as Trump mentioned that the euro bloc will "pay a big price" for not buying enough American exports.

Implementing a 10% tariff on all imported goods advocated by Trump would have a negative impact of 0.1% on the European Union’s (EU) Gross Domestic Product (GDP), according to a recent London School of Economics and Political Science paper. 

Meanwhile, the collapse of the German three-party coalition after Chancellor Olaf Scholz sacked Finance Minister Christian Linder last week has also been a major cause of weakness in the Euro (EUR). According to a Focus Online report, German Olaf will call a confidence vote on December 18 and the snap election on February 23, according to Deutsche Welle news.