- The Euro bounces up and trims previous losses as investors digest the 30% levies on products from the EU announced by Trump.
- Investors remain hopeful of a trade deal between the EU and the US before the deadline on August 1.
- EUR/USD maintains its broader bearish trend intact with 1.1700 resistance capping bulls.
The EUR/USD pair bounced up from lows in the early European session on Monday, and is trading higher for the first time in the past four trading days. The pair, however, maintains its broader bearish trend intact as the 30% levies on all European Union (EU) products announced by US President Donald Trump over the weekend keep risk appetite subdued.
The Euro (EUR) bounced up from fresh three-week lows at the 1.1655 earlier on Monday, but it remains capped between the 1.1700 round level. Looking at the trend since the beginning of the month, the pair has been trading within a bearish channel since peaking at a nearly four-year high at 1.1830 on July 1.
Markets have opened with a mild risk-off tone on the back of Trump’s new round of tariffs, but the reaction so far has been more contained than that of April 2 Liberation Day. Traders seem to have assumed this new threat as a negotiating scheme rather than a final statement.
EU officials maintain their positive approach regarding the ongoing trade talks with Washington and remain hopeful of reaching a deal before the August deadline. The European Union has delayed any retaliatory tariffs, and EU Trade Commissioner, Maros Sefkovic, reiterated that an agreement with the US is imminent, which has provided some support to the Euro.
The economic calendar is practically void on Monday with news from the Eurogroup meeting and European Central Bank’s (ECB) Cipollone speech, due in the European afternoon, likely to guide the Euro. In the US, the focus will be on Tuesday’s Consumer Price Index (CPI) data from June, which might give further clues on the Federal Reserve’s (Fed) easing calendar.
Euro PRICE Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.14% | 0.08% | 0.03% | -0.15% | -0.06% | 0.17% | -0.10% | |
| EUR | 0.14% | 0.19% | 0.15% | -0.02% | 0.08% | 0.31% | 0.04% | |
| GBP | -0.08% | -0.19% | -0.10% | -0.22% | -0.12% | 0.11% | -0.02% | |
| JPY | -0.03% | -0.15% | 0.10% | -0.04% | -0.07% | 0.22% | -0.05% | |
| CAD | 0.15% | 0.02% | 0.22% | 0.04% | 0.09% | 0.33% | 0.06% | |
| AUD | 0.06% | -0.08% | 0.12% | 0.07% | -0.09% | 0.21% | -0.03% | |
| NZD | -0.17% | -0.31% | -0.11% | -0.22% | -0.33% | -0.21% | -0.27% | |
| CHF | 0.10% | -0.04% | 0.02% | 0.05% | -0.06% | 0.03% | 0.27% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily digest market movers: The Euro picks up on hopes of a trade deal with the US
- The Euro is reversing previous losses as hopes of a deal between the EU and the US remain alive. EU officials said that the Union will extend the suspension of countermeasures, prioritizing negotiations, and Trade Commissioner Sefkovic assured that “we are approaching a good outcome for both sides” before announcing that he will be speaking with US counterparts later on Monday.
- On Friday, ECB’s board member Fabio Panetta observed that downside risks to inflation have strengthened and affirmed that the central bank should keep easing its monetary policy, increasing bearish pressure on the common currency.
- Also on Friday, Chicago Fed President Austan Goolsbee warned that Trump’s new tariff threats muddle the inflation outlook and make it more difficult for policymakers to support the rate cuts he is calling for.
- These comments did not stop the US President from continuing to pressure the Fed Chairman. Trump affirmed during the weekend that it would be a “great thing” if Powell stepped down, this time supported by the US Government’s economic adviser, Kevin Hassett, who suggested that the president might be authorized to oust Powell due to the overrun costs of the bank’s headquarters.
EUR/USD picks up from lows, with 1.1700 limiting rallies for now
EUR/USD continues trading lower within the descending channel from July 1highs. Upside attempts remain limited amid a moderate risk-off market, and technical indicators are pointing lower. The Relative Strength Index is low but still above oversold levels, which suggests that further depreciation is on the cards.
Bears failed to confirm below the 1.1660 support area (July 10 and 12 low), but upside attempts remain limited below 1.1700 so far. A bearish continuation below the mentioned 1.1660 might find support at the 50% Fibonacci retracement of the late June bullish run, at 1.1640, ahead of the bottom of the bearish channel from July 1 highs, at 1.1630.
On the upside, above the 1.1700 intraday high, bulls are likely to be challenged at the trendline resistance, now at 1.1730, and the July 10 high at 1.1740.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
Source: https://www.fxstreet.com/news/eur-usd-extends-losses-as-trump-threatens-the-european-union-with-30-tariffs-202507140756