EUR/USD appreciates as United States and European Union reached a trade agreement, easing fears of a broader trade conflict.
The US and EU have set a blanket 15% tariff on goods traded between them, taking effect on August 1.
The Fed is expected to hold its benchmark interest rate steady between 4.25% and 4.50% on Wednesday.
EUR/USD gains ground after registering losses in the previous two sessions, trading around 1.1770 during the Asian hours on Monday. The pair appreciates as the Euro (EUR) receives support as the United States (US) and European Union (EU) reached a trade agreement over the weekend, easing fears of a broader trade conflict.
The two economies have reached a framework trade agreement on Sunday that sets a blanket 15% tariff on goods traded between them, taking effect on August 1. This deal has ended a months-long stand-off, per Bloomberg.
European Commission President Ursula von der Leyen said on Sunday that the bloc agreed not to impose retaliatory tariffs and pledged $600 billion in investment in the US on top of existing expenditures.
The European Central Bank (ECB) left interest rates unchanged last week, stating that disinflation is progressing in line with its earlier projections. The ECB emphasized the need for additional data on economic developments before providing further clarity on its policy outlook.
Traders expect the US Federal Reserve (Fed) to hold its benchmark interest rate steady between 4.25% and 4.50% at its July meeting on Wednesday. The FOMC press conference will be observed for any signs that rate cuts may start in September. Markets have priced in nearly a 62% odds of a rate cut in September, according to the CME Group's FedWatch tool.
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
