FX.co ★ Euro Hits 1-Month High

The euro has risen towards $1.14, marking its strongest position in approximately a month, following President Trump's announcement to postpone a proposed 50% tariff on European Union imports. Last Friday, Trump had expressed frustration over stalled trade discussions with the EU, suggesting that harsh tariffs would be implemented from June 1. However, after a conversation with the European Commission President, Ursula von der Leyen, President Trump agreed to extend the trade negotiations deadline to July 9. As per the reciprocal tariff framework introduced in April, the EU currently faces a 20% levy, though it has been temporarily lowered to 10% until the new deadline. Meanwhile, the economic outlook for the Eurozone remains precarious. The European Commission has revised its growth forecast for 2024 down to 0.9%. Purchasing Managers' Index (PMI) data for May unexpectedly revealed a contraction in private sector activity in both the Eurozone and Germany, primarily due to a significant decline in the services sector resulting from tepid domestic demand. Regarding monetary policy, it is widely anticipated that the European Central Bank (ECB) will lower interest rates at its upcoming June meeting.