Euro Hits 1-Month High
The euro edged higher toward $1.14, its strongest level in about a month, after President Trump announced a delay in the planned 50% tariff on EU imports.
Last Friday, Trump had declared that trade talks with the EU were “going nowhere” and proposed imposing the steep tariff starting June 1. However, following a phone call with EC President von der Leyen, Trump announced an extension of trade negotiations until July 9. Under the reciprocal tariff framework unveiled in April, the EU faces a 20% levy, which has been temporarily reduced to 10% through the new deadline.
Meanwhile, the Eurozone’s economic outlook remains fragile. The EC has cut its 2024 growth forecast to 0.9%. PMI data for May showed that private sector activity unexpectedly slipped back into contraction in both the Eurozone and Germany, driven by a sharper downturn in the services sector amid weak domestic demand. On the monetary policy front, the ECB is widely expected to cut interest rates at its June meeting.
Source: Trading Economics
