Euro Declines against USD as EU Plans Tariff Response
The euro declined against the US dollar on Monday, trading toward $1.17 as investors ’awaited further clarity on upcoming US tariff measures.
The global market paused for breath again as investors and forex traders reacted to new tariffs pushed by the US administration with mixed sentiment.
Forex options buyers queue behind the greenback after a better-than-expected job report and the expectation that a rate cut will be much easier as Donald Trump plans a shadow Fed chair.
The European Union said it is making progress toward a trade agreement with the US, aiming to prevent a major tariff escalation through a preliminary deal that would impose a 10% universal tariff on many goods.
The EU is looking at reduced rates for key sectors such as pharmaceuticals, alcohol, semiconductors, and commercial aircraft.
In a statement, the EU also announced preparations for retaliatory tariffs on a range of US products in response to President Trump’s metal duties.
Officials warned that, if no agreement is reached, additional measures—such as export controls and restrictions on US access to public contracts—may follow.
Meanwhile, Commerce Secretary Howard Lutnick confirmed that the broader US tariff package—initially slated for July 9—has been postponed to August 1. On the monetary policy front, markets are now pricing in just one more rate cut from the ECB this year.
US dollar Index
Dollar has been hurt but seems to be in recovery mode. The relationship between the DXY dollar index and rate differentials has broken down this year.
This points to other factors dominating the dollar’s recent weakness, including elevated U.S. economic policy uncertainty and structural forces such as investors hedging against losses arising from dollar fluctuations and U.S. current account pressures. #Euro Declines against USD as EU Plans Tariff Response #
