EUR/USD fumbles again as trade deal hopes bolster Greenback bids
EUR/USD trimmed into the low end on Thursday, shedding a little over two-thirds of one percent from the day’s opening bids after US Dollar (USD) bids caught a broad-market boost following the tentative announcement of a pending trade deal between the United States (US) and the United Kingdom (UK). Europe still appears to be on the outs with the Trump administration, with White House officials continuing to warn the pan-EU continent to “not retaliate” against US import taxes.
The US-UK trade deal would allow the UK to evade high “reciprocal” tariffs that are set to reinstate on July 9, after President Trump temporarily postponed his own ‘Liberation Day’ tariffs. However, a broad 10% tariff remains planned for all imports from the UK into the US, which may dampen market sentiment soon. The Trump administration has fully suspended tariffs on significant imports like refined ethanol. Data indicates that the US has not imported refined ethanol from the UK for at least 15 years.
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Source: Fxstreet
