Dollar rises against major peers after US-EU trade pact
The dollar rose against the euro and yen on Monday as markets were buoyed by a trade agreement between the U.S. and the EU, which brought some market certainty and averted a global trade war.
U.S. President Donald Trump and European Commission President Ursula von der Leyen reached a framework trade agreement on Sunday, which provides for an import tariff of 15% on EU goods, half the rate Trump had threatened from August 1.
That follows last week's U.S. agreement with Japan, while top U.S. and Chinese economic officials resumed talks in Stockholm on Monday, aiming to extend a truce by three months and keep sharply higher tariffs at bay.
The dollar rose against the safe-haven Swiss franc , up 1% at 0.80325 francs. It rose against the Japanese yen , up 0.59% at 148.535.
The euro was last down 1.25% at $1.159125 , set for its biggest daily loss since mid-May, reversing an initial knee-jerk rise in Asia trade as investors' focus shifted to what an easing in global trade tensions meant for the dollar overall.
The dollar tumbled sharply earlier this year, particularly against the euro, as fears that dramatically higher tariffs on trade with most of its major partners would hurt the U.S. economy caused investors to consider shifting out of U.S. assets.
The euro fell against the yen and sterling, having hit a one-year high on the Japanese currency and a two-year high on the pound at the start of trade. ,
The dollar strengthened against the pound, which was 0.67% lower at $1.33545.
As concerns subside about the economic fallout from punishing tariffs, investor attention is shifting to corporate earnings and central bank meetings in the United States and Japan in the next few days.
Both the Fed and the Bank of Japan are expected to hold rates steady at policy meetings this week, but traders will watch subsequent comments to gauge the timing of the next moves.
Investors will also be watching to see Trump's reaction to the Fed's decision. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 1.5 basis points to 3.932%, from 3.917% late on Friday.
Trump has been putting the Fed under heavy pressure to make significant rate cuts, and Trump appeared close to trying to fire Powell last week, but backed off with a nod to the market disruption that would likely follow.
In cryptocurrencies, bitcoin fell 0.52% to $118,205.38. Ethereum declined 0.61% to $3,800.90.
Source : Reuters
