EUR/USD holds supported by improving mood
EUR/USD holds steady above 1.1650 in the European session on Monday after snapping a three-day winning streak previous Friday. While the improving risk mood helps the pair keep its footing, buyers remain hesitant following S&P Global Ratings' decision to downgrade France's credit rating to A+ from AA-.
The US Dollar (USD) gathered strength on Friday and caused EUR/USD to stretch lower. In the absence of high-impact data releases, United States (US) President Donald Trump's relatively less aggressive tone on trade relations with China helped the USD stay resilient against its peers.
Trump acknowledged that 100% tariff would not be sustainable and added that he this they are "going to do fine" with China.
Over the weekend, Trump said that he wants China to buy soybeans at least in the amount they were buying before and noted that he believes China will make a deal on soybeans.
Meanwhile, S&P Global Ratings downgraded France's credit rating to A+ from AA-, citing the country's elevated budget uncertainty despite the submission of a 2025 draft budget.
In the second half of the day, the risk perception could drive EUR/USD's action. In the early European session, US stock index futures rise between 0.3% and 0.5%. In case risk flows dominate the action in the second half of the day, the USD could struggle to outperform its rivals. However, any positive developments in the US-China relations could support the USD, alongside Wall Street's main indexes.
Source: Fxstreet
