FX.co ★ Euro Off from Recent Highs

The euro remained around $1.17, staying close to a three-week low as traders assessed the latest trade developments. U.S. President Trump announced a 30% tariff on European Union imports effective August 1st, although he later expressed willingness to negotiate. In turn, the EU reaffirmed its aim to reach a trade agreement, delaying any immediate counteractions and extending the postponement of planned retaliatory tariffs until early August to facilitate further discussions. Regarding monetary policy, investors largely anticipate that the European Central Bank (ECB) will maintain current borrowing rates in the upcoming meeting. Nonetheless, market forecasts still suggest a potential 25 basis point rate cut later this year. Despite the euro's recent decline in July, it has appreciated nearly 13% against the dollar since the start of the year, buoyed by widespread dollar weakness and renewed optimism regarding the eurozone's economic prospects, particularly following Germany's move towards increased fiscal spending.