Dollar reaches one-month high versus euro on trade | Money News

By Chibuike Oguh

NEW YORK (Reuters) -The greenback hit a one-month high versus the euro on Tuesday within the wake of a string of trade agreements between the United States and its main trade companions, whereas markets await rate of interest selections from the Federal Reserve and the Bank of Japan.

U.S. President Donald Trump struck his largest trade deal but with the European Union on Sunday, which imposes a 15% import tariff on most EU items and consists of $600 billion of EU investments into the United States. It tops a $550 billion deal signed with Japan final week that features a 15% reciprocal tariff.

U.S. and Chinese officers completed two days of talks in Stockholm on Tuesday. While there have been no indicators of breakthroughs, each side agreed to increase a 90-day tariff truce struck in mid-May, China’s prime trade negotiator, Li Chenggang, stated.

The euro was down 0.39% in opposition to the greenback at $1.154775, hitting its lowest stage since June 23. The single currency had dropped 1.29% within the earlier session, its steepest one-day decline since mid-May. The euro is poised to report its first month-to-month loss in opposition to the greenback this 12 months.

“After falling sharply in the first half of the year, the dollar began July with a bounce, and I think it’s mostly short covering. And the issue is whether this is a trend change or an overdue technical correction,” stated Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

The greenback index, which measures the buck in opposition to a basket of currencies together with the yen and the euro, rose 0.30% to 98.91, hitting its highest stage since June 23. The index is set to report its first month of positive factors this 12 months.

“The market had a sigh of relief that the tariffs, at the least the plan announced with Japan and the EU and the likely 90-day extension with China, helped remove downside tail risk,” Chandler stated.

Several EU leaders have criticized the trade settlement reached with the United States. German Chancellor Friedrich Merz stated his nation would undergo vital harm due to the agreed tariffs. France’s prime minister on Monday referred to as the settlement a “dark day” for Europe.

Markets anticipate that the Fed will go away rates of interest unchanged on the finish of its two-day financial coverage assembly on Wednesday. U.S. Treasuries slipped on Tuesday, with the yield on benchmark U.S. 10-year notes falling 8.6 foundation factors to 4.334%.

“Ahead of (Wednesday’s) Fed decision, we might get some consolidation. People are concerned about a possible dissent from at least one of the governors, maybe it’s Waller or Bowman,” Chandler added.