Euro eases after Trump threatens 30% tariffs on EU | Money News

By Rae Wee

SINGAPORE (Reuters) -The euro fell to a three-week low on Monday whereas the Mexican peso additionally got here beneath stress after President Donald Trump threatened to impose a 30% tariff on imports from two of the most important U.S. trading companions starting August 1.

Trump on Saturday introduced the most recent tariffs in separate letters to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum that have been posted on his Truth Social media website.

Both the European Union and Mexico described the tariffs unfair and disruptive, whereas the E.U. mentioned it will prolong its suspension of countermeasures to U.S. tariffs till early August and proceed to press for a negotiated settlement.

Reaction within the currency market to Trump’s newest tariff threats was largely muted within the early Asian session, although the euro did slip to a roughly three-week low and final traded 0.15% decrease at $1.1675.

Against the Mexican peso, the greenback rose 0.2% to 18.6630.

Elsewhere, nonetheless, the greenback made restricted features, with sterling down simply 0.04% to $1.3485, whereas the Japanese yen rose 0.1% to 147.27 per greenback.

Investors have grown more and more desensitised to Trump’s slew of tariff threats, together with his newest upheaval within the world commerce panorama doing little to stop U.S. shares from scaling file highs and offering simply a slight enhance to the greenback.

“It is hard to say whether the muted market response over the week is best characterised by resilience or complacency,” mentioned Taylor Nugent, senior economist at National Australia Bank.

“But it is difficult to price the array of headlines purportedly defining where tariffs will sit from August 1 when negotiations are ongoing and the key substantive development recently is that the earlier July 9 reciprocal tariff deadline came and went without an increase in tariff rates.”

In different currencies, the Australian greenback ticked up 0.02% to $0.6575, whereas the New Zealand greenback fell 0.07% to $0.6004.

Outside of tariff information, Trump on Sunday mentioned that it will be a great factor if Federal Reserve Chair Jerome Powell stepped down, again threatening to undermine the central bank’s independence as he requires rates of interest to be lowered.

Traders may get a higher clue on the long run path for U.S. charges when inflation knowledge for June comes due on Tuesday, the place expectations are for U.S. shopper costs to have picked up barely final month.

Markets are presently pricing in simply over 50 foundation factors value of Fed easing by December.

Also on buyers’ radars would be the release of Chinese gross home product figures equally out on Tuesday.