Tariff Tensions Rise As Trump Targets EU
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Daily Currency Update
Attention has been sharply drawn to escalating trade tensions, following reports that President Trump is pushing for steep new tariffs on European Union goods.Adding to market unease, US Commerce Secretary Howard Lutnick stated on Sunday that while he remains confident a trade deal with the EU can be reached, August 1st is a firm deadline for the implementation of tariffs. This looming date is likely to heighten FX market volatility, particularly for EUR/USD, as traders price in the potential impact on growth, inflation, and policy divergence between the US and Europe.
Key Movers
The European Central Bank meets this week and is expected to pause its rate-cutting cycle, following a series of reductions aimed at supporting the eurozone economy. Markets will be watching closely for signals on future easing, with any dovish tone likely to add pressure on the euro and support risk assets.Meanwhile, investor focus in the US remains firmly on the Federal Reserve, as speculation swirls over potential political influence. Despite recent pressure from former President Trump including reports he nearly attempted to remove Fed Chair Jerome Powell—the Fed is expected to hold rates steady at its July meeting.
Expected Ranges
- GBP/USD: 1.3415 - 1.3495 ▲
- GBP/EUR: 1.1525 - 1.1595 ▲
- GBP/AUD: 2.0625 - 2.0725 ▲
- EUR/USD: 1.1605 - 1.1685 ▲