The euro remained stable just below the $1.18 level, approaching its strongest point since August 2021. This steadiness comes as investors direct their attention towards trade developments and new insights from European Central Bank (ECB) policymakers. President Trump announced that the US will begin issuing formal notifications to its trading partners regarding the tariff rates applied to their exports to the US. This marks a change from previous assurances of multiple bilateral agreements ahead of the upcoming July 9 deadline, when tariff increases are scheduled. While the European Union has indicated a willingness to reach an agreement, it is also preparing for the possibility of negotiations falling through.
In terms of monetary policy, market expectations now suggest only one additional rate cut from the ECB this year. Officials have suggested that interest rates will likely remain unchanged during this month’s meeting, following eight consecutive cuts since June 2024. With inflation hitting the ECB's 2% target, policymakers proceed with caution amidst ongoing global trade instability and the recent strengthening of the euro.
