FX.co ★ Euro Slips to April Lows as US-China Tariff Truce Lifts Dollar

The euro weakened, approaching $1.10, marking its lowest point since April 9, as improving trade relations between Washington and Beijing strengthened the US dollar. The United States and China reached a significant agreement in Geneva to reduce tariffs for a 90-day period, marking a major step in de-escalating the trade tensions that intensified last month. As part of the agreement, US tariffs on Chinese products will decrease from 145% to 30%, while China's tariffs on US imports will fall from 125% to 10%. In other geopolitical news, Ukrainian President Zelenskiy expressed his readiness to meet with Russian President Putin in Turkey this Thursday, while a fragile ceasefire continues to hold between India and Pakistan. On the monetary policy front, the money markets are now anticipating the ECB's deposit facility rate to reach 1.75% by the end of the year—returning to levels observed in mid-April, prior to the ECB hinting at potential rate cuts to mitigate any economic impacts from US tariffs. As recently as April 25, markets were expecting a rate below 1.55%, with a rise to 1.67% by late Friday.