Dollar gains against major peers after US-EU trade pact
The dollar gained against major currencies including the euro and yen on Monday with sentiment lifted by a trade agreement between the U.S. and the EU, which brings market certainty and averts a global trade war.
U.S. President Donald Trump and European Commission President Ursula von der Leyen reached a framework trade agreement, 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 will resume 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 0.82% at 0.80155 francs. It rose against the Japanese yen , up 0.29% at 148.12.
The euro was last down 0.81% at $1.164275 , 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 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 strengthens against the pound, which was 0.24% lower at $1.3422.
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 U.S. president 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 addition, quarterly results are due in coming days from Apple, Microsoft, Amazon and Facebook parent Meta Platforms META.O, four of the whose stocks heavily influence benchmark indexes.
They matter for currency investors if strong results cause an acceleration of flows back into U.S. assets.
Source : Reuters
