- The Euro retreats from over two-week highs against the US Dollar amid growing uncertainty about the EU-US trade deal.
- The US Dollar nudges higher as President Trump announced a “massive deal” with Japan.
- EUR/USD’s immediate bias remains positive, with downside attempts limited above previous highs.
The EUR/USD pair is trading lower on Wednesday, giving away some gains following a 1.3% rally over the last three days. Investors’ concerns about the lack of progress in trade negotiations between the United States (US) and the European Union (EU), combined with a somewhat stronger US Dollar (USD), are keeping the common currency on the back foot.
The Euro (EUR) retreated from two-week highs of 1.1760 against the US Dollar on Tuesday and is trading around 1.1730 in the early European trading session on Wednesday. The immediate trend, however, remains positive after having bounced from last week’s lows at 1.1555, with downside attempts held above a previous resistance at 1.1720.
Risk appetite returned to the market following the announcement of a trade deal between the US and Japan, but is failing to support the Euro. A trade agreement between the EU and US remains elusive, and this is keeping investors on edge. EU representatives will be flying to Washington on Wednesday in an attempt to secure a deal, but the bloc is studying retaliatory measures in case the negotiations fail.
In the economic calendar, the preliminary European Commission’s (EC) Consumer Sentiment Index for July, due at 14:00 GMT, will be the main release on Wednesday. The highlight of the week, however, will be the European Central Bank’s (ECB) monetary policy decision on Thursday, which is expected to provide some clues about the bank’s near-term policy plans and the Eurozone’s economic outlook.
Euro PRICE Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.16% | 0.05% | 0.29% | -0.02% | -0.26% | -0.50% | 0.11% | |
| EUR | -0.16% | -0.11% | 0.12% | -0.18% | -0.44% | -0.65% | -0.05% | |
| GBP | -0.05% | 0.11% | 0.26% | -0.06% | -0.33% | -0.54% | 0.12% | |
| JPY | -0.29% | -0.12% | -0.26% | -0.30% | -0.53% | -0.68% | -0.17% | |
| CAD | 0.02% | 0.18% | 0.06% | 0.30% | -0.22% | -0.27% | 0.16% | |
| AUD | 0.26% | 0.44% | 0.33% | 0.53% | 0.22% | -0.21% | 0.44% | |
| NZD | 0.50% | 0.65% | 0.54% | 0.68% | 0.27% | 0.21% | 0.66% | |
| CHF | -0.11% | 0.05% | -0.12% | 0.17% | -0.16% | -0.44% | -0.66% |
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: Euro recovery loses steam on trade uncertainty
- The Euro fails to extend its rally for the fourth consecutive day, as high uncertainty surrounding the trade relationship between the EU and the US and the threat of facing 30% tariffs from August 1 are starting to undermine speculative demand for the common currency.
- Beyond that, traders might be cutting some Euro long positions as markets head into the ECB’s monetary policy decision. The bank is widely expected to keep interest rates on hold, as inflation remains steady near the target rate of 2%, but the soft economic momentum of some of the region’s major economies and the prospects of a trade war with the US might heighten hopes of further monetary easing in September.
- Later on the day, the preliminary EC’s Consumer Sentiment Index is expected to have improved somewhat, to a reading of -15 in July from the -15.3 seen on the previous month. These numbers are well below the long-term average, which reflects a soft economic context. Unless there is a positive surprise, these data are unlikely to provide any significant support to the Euro.
- Earlier on Wednesday, US President Donald Trump announced a “massive trade deal” with Japan. Tariffs on imports from the Asian country have been lowered to 15% from the 25% levy announced a few weeks ago, while, according to Trump, Japan will invest $550 billion in the US. The US Dollar picked up from lows following the news.
EUR/USD maintains its positive bias while above 1.1720
EUR/USD is correcting lower after a significant rally over the last three days, which pushed the 4-hour Relative Strength Index (RSI) to oversold levels. The pair, however, maintains its immediate bullish structure intact, with downside attempts contained above a previous resistance, now turned support, at 1.1720.
Further depreciation below the mentioned 1.1720 (July 16, Monday’s highs) would give bears hope for a retest of Tuesday’s lows at 1.1680 ahead of a reverse trendline, now at 1.1645. On the upside, Tuesday’s high at 1.1760 is capping bulls for now and closing the path towards the July 7 highs at 1.1790 and the long-term highs, at 1.1830, hit on July 1.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Source: EUR/USD pares previous gains with investors focusing on the US tariffs deadline
