FX.co ★ Dollar Slips as Euro Strengthens on US-EU Trade Deal

The US dollar index saw a decline to approximately 97.5 on Monday, pulling back after a two-day increase as the euro gained strength in response to the weekend's trade agreement between the US and the EU. This agreement, which enforces a 15% tariff on most European exports—reduced from the initially proposed 30%—has alleviated tensions over transatlantic trade and increased demand for the euro. Simultaneously, attention is shifting toward a significant week concerning US monetary policy and economic data. It is largely anticipated that the Federal Reserve will maintain current interest rates at their Wednesday meeting; however, market participants will be attentively monitoring for any indication of a potential rate cut in September. Additionally, the forthcoming Personal Consumption Expenditures report, a key inflation measure favored by the Federal Reserve, will provide valuable insights into the effects of tariffs on consumer prices. This week also promises a series of labor market updates, culminating in Friday's highly anticipated monthly jobs report.