- EUR/USD increases by 0.18% in slim trade, because traders digest sweeping Trump’s tariff plans and fastening of EU -USA tension.
- Trump confirms the tariffs to 70%to enter into force on August 1, attacking EU goods, including food.
- Bloomberg: EU carameci are looking for a tariff relief through investment obligations in the USA.
- Light shifts of the US calendar on German industrial production and Eurogroup meetings next week.
EUR/USD recorded a minimum profits of 0.18% among slim liquidity on Friday, because markets in the United States are closed due to holidays on Independence Day. The common currency is ready to close a week with 0.53%profits, despite the spending of solid economic data in the US this week. At the time of writing, the pair trads at 1,1778.
Economic news is on Friday that market participants drew attention to tariffs and approval of “One Big Beautiful Bill” by US President Donald Trump.
On Thursday, Trump announced that the United States would start issuing letters of the declaration, notifying the countries that the tariffs are used for their goods and services. He added that the obligations may be from 10% to 70%, and in the meantime there will be tensions around the European-US trade agreement, because Washington announced 17% of European food obligations.
In the meantime, Bloomberg announced that “some manufacturers of the European Union car and tables insist on agreement with President Donald Trump, which would allow a tariff relief in exchange for increasing investments in the USA, according to people familiar with the case.”
An absent economic document in the USA left EUR/USD traders when they turned to the European Union document (EU). German industrial orders fell below estimates in May every month, but compared to the numbers from the same month in the previous year showed a slight improvement.
On Monday, in Docket EU, they will contain German industrial production data, Eurogroup meeting, EBC speakers and an announcement of retail sales data to May.
Daily Digest Market Movers: EUR/USD climbs a airy economic calendar
- US President Trump said that his administration would start notifying countries about the fresh US tariffs about their exports, due to August 1. He said that about ten to twelve letters would be sent on Friday. Additional lists will be widespread in the coming days, before July 9.
- “One Big Beautiful Bill” approved by the US Congress will add $ 3.4 trillion within a decade to the national deficit. The bill was aimed at extending tax reductions implemented in 2017 and the allocation of billions of dollars to enforce defense and immigration. At the same time, it reduces some healthcare programs, food assistance and pristine energy projects.
- Bloomberg’s article revealed that the EU and the US are approaching a technical trade agreement. The EU suggested that they were ready to accept a 10% universal tariff, but in exchange for lower rates of pharmaceuticals, alcohol, semiconductors and aircraft. They also look for amounts and layoffs to reduce current tariffs for cars, steel and aluminum. Negotiations between the two sides will be continued at the weekend.
- German factory orders in May fell in April 1.4% of mother from 1.6% expansion. Within twelve months to May it fell from 5.8% to 5.3%, revealed Deutsche Bundesbank.
Euro technical perspectives: EUR/USD jumps in the direction of 1,1780 as Bulls Eye 1.1800
EUR/USD trades on Friday and is ready to create “stubborn hami”, which indicates that in long -term long -term it remains intact. Nevertheless, a clear break is needed at the highest level of July 3 of 1,1809, ahead of the highest level of 1.1830 annually. After cleaning these levels, the next stop would be 1.1850 and 1,1900.
And vice versa, if EUR/USD drops below 1.1750, opens the door to a potential decline to 1.1700. In case of further weakness, the next level of support will be a high level of June 12 to 1,1631.
FAQ euro
The euro is the currency of 19 European Union countries, which belong to the euro area. This is the second most frequently commercial currency in the world behind the American dollar. In 2022, it accounted for 31% of all currency transactions, with an average daily turnover of over USD 2.2 trillion per day. EUR/USD is the most rotating currency pair in the world, which is about a 30%discount on all transactions, followed by EUR/JPy (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (EBC) in Frankfurt, Germany is a bank reserve bank. EBC sets interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means either controlling inflation or stimulating growth. Its main tool is to augment or reduce interest rates. Relatively high interest rates – or waiting for higher feet – will usually bring the benefits of the euro and vice versa. The ECB Managing Council makes decisions regarding monetary policy at meetings taking place eight times a year. Decisions are made by the heads of national banks of the euro area and six constant members, including the President of EBC, Christine Lagarde.
Data on inflation in the euro area, measured by a harmonized consumer price indicator (HICP), are an significant econometric for the euro. If inflation increases more than expected, especially if it is above the target 2% EBC, it obliges EBC to raise interest rates to restore it to control. Relatively high interest rates compared to its counterparts will usually benefit the euro, because it makes the region more attractive as a place for global investors to park their money.
The data release the health of the economy and can affect the euro. Indicators such as GDP, PMI production and services, surveys regarding employment and consumer moods can affect the direction of the common currency. A robust economy is good for the euro. It not only attracts more foreign investment, but can encourage EBC to set interest rates, which will directly strengthen the euro. Otherwise, if economic data is tender, the euro will probably fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are particularly significant because they constitute 75% of the euro area economy.
Another significant issue of data for the euro is the commercial balance. This indicator measures the difference between what the country earns on exports and what spends on imports in a given period. If the country generates a highly sought after export, its currency will gain value only from additional demand created by foreign buyers trying to buy these goods. Therefore, a positive net trade balance strengthens currency and vice versa for a negative balance.
