- The EUR/USD is stabilized near the 1725 support since the EU is fought from new US tariff measures for now.
- Trump urges the Fed to cut rates, delays the deadline of tariffs to August 1.
- The appetite for risk fades while the US considers tariffs in the technological and pharmaceutical sectors.
The EUR/USD records minimal profits during the North American session as the US dollar erases some of its previous profits, after the demand of the US president, Donald Trump, that the Federal Reserve cuts the interest rates, while delays the deadline of July 9 towards August 1. At the time of writing, the torque is negotiated at 1,1724, with an increase of 0.14%.
The appetite for the risk became negative at the last minute of the day, in the midst of uncertainty about commercial policies. The US Secretary of Commerce, Howard Lutnick, said he hopes that another 15-20 letters will be sent in the next few days, according to an interview with CNBC. Meanwhile, Trump’s threats to expand tariffs on pharmaceutical products, semiconductors and copper weighed on the mood of investors.
Regarding data, the US economic agenda revealed that small businesses decreased, according to a survey by the National Federation of Independent Business (NFIB).
The shared currency stopped the losses of Monday since the White House did not directed additional tariffs towards the European Union (EU). Recently, Trump acknowledged that the conversations between the US and Europe are advancing, adding that the EU has been “very kind” with the USA.
Meanwhile, the US economic agenda remains empty, with operators attentive to the publication of the Minutes of the Federal Open Market Committee (FOMC) of June. In the EU, a series of officials from the European Central Bank (ECB) will cross the cables, headed by Vice President Luis de Guindos, Chief economist Philip Lane and Joachim Nagel.
What moves the market today: the euro recovers since Trump said that the deadline of August 1 is final
- The dollar strength presses the EUR/USD. The US dollar index (DXY), which tracks the value of the dollar against a basket of six currencies, finished the session of Tuesday flat in 97.51.
- The president of the USA, Donald Trump, published that the president of the Federal Reserve, Jerome Powell, should cut rates now, after having said that I should immediately renounce earlier in the day. It delays the deadline from July 9 to August 1, although he said he would not extend it. As for the European Union (EU), he said that the EU is treating the US very well, so he refrained from sending the tariff letter.
- Trump added that it could have been harder in trade and announced that it would impose tariffs on pharmaceutical products, semiconductors and copper, which, he said, would result in tariffs of around 50%.
- The NFIB small businesses optimism index fell to 98.6 in June, slightly below the expectations of 98.7 and a decrease with respect to the reading of May 98.8. The decrease was mainly driven by an increase in the number of respondents cite excessive inventories.
- The EU declared that there have been some advances in a Marco Commercial Agreement with the United States (USA), according to EU spokesman Olof Gill. He indicated that Ursula von der Leyen had a call with Trump on Sunday, saying that “they had a good exchange.”
EURO TECHNICAL PERSPECTIVE: EUR/USD cling to 1,1700 while the pair is consolidated
From a technical perspective, the torque is neutral, with well -defined support and resistance levels. The relative force index (RSI), although bullish, has become flat, indicating that neither buyers nor sellers are in control.
For an upward continuation, the EUR/USD must exceed the maximum of July 7, 1,1789 before buyers fix their gaze at 1,1800. The key resistance is above with the maximum of the year to date (YTD) of 1,1829.
On the contrary, if the EUR/USD falls below 1,1700, this will expose the simple mobile average (SMA) of 20 days as the first support level in 1,1649. A rupture of this last will expose the figure of 1,1600, followed by the 50 -day SMA in 1,1448.
EURO – FREQUENT QUESTIONS
The euro is the currency of the 19 countries of the European Union that belong to the Eurozone. It is the second most negotiated currency in the world, behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily business volume of more than 2.2 billion dollars a day. The EUR/USD is the most negotiated currency pair in the world, with an estimate of 30 %of all transactions, followed by the EUR/JPY (4 %), the EUR/GBP (3 %) and the EUR/AU (2 %).
The European Central Bank (ECB), based in Frankfurt (Germany), is the Eurozone reserve bank. The ECB establishes interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means controlling inflation or stimulating growth. Its main tool is the rise or decrease in interest rates. Relatively high interest rates (or the expectation of higher types) usually benefit the euro and vice versa. The GOVERNMENT BOOK of the ECB makes decisions about monetary policy in meetings that are held eight times a year. The decisions are made by the directors of the National Banks of the Eurozone and six permanent members, including the president of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the harmonized consumer prices index (IPCA), are an important economic indicator for the euro. If inflation increases more than expected, especially if it exceeds 2% of the ECB, it forces the ECB to rise interest rates to control it again. Relatively high interest rates compared to their counterparts usually benefit the euro, since they make the region more attractive as a place for global investors to deposit their money.
Published data measure the health of the economy and can have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer trust surveys can influence the direction of the single currency. A strong economy is good for the euro. Not only attracts more foreign investment, but it can encourage the ECB to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the euro is likely to fall. The economic data of the four largest economies in the euro zone (Germany, France, Italy and Spain) are especially significant, since they represent 75% of the economy of the euro area.
Another important fact that is published on the euro is the commercial balance. This indicator measures the difference between what a country earns with its exports and what you spend on imports during a given period. If a country produces highly demanded export products, its currency will gain value simply by the additional demand created by foreign buyers seeking to buy those goods. Therefore, a positive net trade balance strengthens a currency and vice versa in the case of a negative balance
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
