- The EUR/USD gains land about 1,1745 in the Asian session on Tuesday, adding 0.30% in the day.
- The EU hastened to conclude a commercial agreement with the US this week.
- Fed fees cutting bets are fading due to solid US employment data in June.
The EUR/USD PART attracts some buyers here around 1,1745 during the Asian negotiation hours on Tuesday. Optimistic eurozone retail sales data for May provide some support for the euro (EUR) against the US dollar (USD). The operators will closely follow development around the commercial agreement between the United States (USA) and the European Union (EU).
The EU hopes to reach a preliminary commercial agreement with the US this week, which would allow it to set a 10% tariff rate beyond the deadline of August 1 while negotiating a permanent agreement. The operators react to reports that the US proposed an offer that would maintain the base tariffs of 10% but would exempt sensitive industries such as alcoholic airplanes and drinks. Investors see 10% as a more acceptable amount for levies compared to other counterparts, which will support the shared currency in the short term.
The data published by Eurostat on Monday revealed that the retail sales of the Eurozone grew by 1.8% year -on -year in May, compared to a revised increase of 2.7% in April. This figure exceeded the market consensus of 1.2%. In monthly terms, retail sales of the Eurozone decreased 0.7% in May compared to the previous 0.3% (reviewed from 0.1%), aligning with market expectations.
On the other side of the Atlantic, the economic data of the US of Friday that reflect the resilience of the labor market delayed the expectations of an imminent relief of monetary policy by the Federal Reserve (FED). According to the CME Fedwatch tool, the probability of a reduction in July is decreasing from 25% to less than 5%. The publication of the FOMC minutes will occupy the center of the stage later on Wednesday. This report could offer information about how FED officials see the US economy.
Tariffs – Frequently Questions
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
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.
