FX.co ★ Euro Pressured as Trump Slaps 30% Tariff

The euro fell close to $1.165 on Monday, reaching its lowest point in over two weeks. This drop followed an announcement by U.S. President Trump regarding the imposition of a 30% tariff on imports from the European Union and Mexico, scheduled to take effect on August 1. This decision has escalated global trade tensions, putting pressure on the euro. In response, officials from the EU and Mexico have expressed their intention to continue negotiations with the Trump administration this month in hopes of achieving a reduced tariff rate. On Sunday, European Commission President Ursula von der Leyen mentioned that the EU would postpone its planned retaliatory tariffs, which were originally set to be implemented today. Despite this recent decline in July, the euro has increased by nearly 13% against the dollar since the start of the year, driven by general dollar weakness and heightened optimism regarding the eurozone's economic prospects, particularly after Germany's shift toward more significant fiscal spending. In terms of monetary policy, the European Central Bank (ECB) is likely to maintain current interest rates at its next meeting, although the markets still expect at least one more rate cut within the year.