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On Tuesday, the EUR/USD pair, the world’s most traded currency pair, edged up 0.09% to 1.1718, driven by optimism over a potential U.S.-EU trade deal and solid Eurozone economic data.
President Donald Trump announced a letter outlining tariff rates could be sent to the EU within two days, while confirming a 10% tariff on BRICS nations, calling it “low and fair” to protect U.S. economic standards.
The EU is negotiating to secure a 10% baseline tariff on its goods, with exemptions for sectors like aircraft and spirits, and benefits for EU automakers exporting from U.S. plants. The Trump administration’s extension of the tariff reinstatement deadline to August 1 offers negotiation leeway, but uncertainties persist without guarantees against further U.S. policy shifts.
Eurozone Retail Sales for May grew 1.8% year-on-year, beating the 1.2% forecast, despite a 0.7% monthly drop, providing modest Euro support. The EUR/USD pair, up 2.38% over the past month and 8.48% over the year, remains in an uptrend within a rising channel, though technical indicators show a neutral stance with mixed oscillator and moving average signals.
The day’s trading range spanned 1.1683 to 1.1766, with the 52-week range at 1.0146 to 1.1831. Traders are focused on U.S.-EU trade developments and upcoming U.S. economic releases, like the FOMC Minutes, while a robust U.S. labor market tempers Federal Reserve rate cut expectations. A favorable trade deal could further lift the Euro, but tariff risks and U.S. data may cap gains.
