Euro slows, dollar climbs with US tariffs gripping markets

The EURUSD pair is accelerating its reversal on Monday, as the US Dollar appreciates, in tandem with US Treasury yields. Growing uncertainty about the outlook of global trade, as the initial July 9 deadline approaches, has restored the traditional safe-asset status to the US Dollar, at least for now.

The Euro has returned to the lower range of the 1.1700s, at the early European trading session, and is moving right below 1.1720. Correlation studies suggest a deeper Euro correction if the USD Index recovery extends below the key 97.00 level.

Eurozone’s upbeat German Industrial Production figures and a mixed Retail Sales report have failed to provide any significant support to the Euro, which remains on the back foot amid an intense risk aversion.

US President Donald Trump is expected to start sending letters to trade partners on Monday, informing them about the levies applied to their products. The deadline to introduce those tariffs is on Wednesday, but comments from Treasury Secretary Scott Bessent suggesting that the levies will be applied from August 1 have added uncertainty to the issue, which is keeping investors on edge.

Nearly three months after Trump announced a moratorium on tariffs, only three countries have closed trade deals with the US: China, the UK, and Vietnam. In China’s case, the deal was more based on a de-escalation of previously imposed levies rather than a proper trade agreement.

The US administration, however, keeps touting upcoming deals in the coming days. Market sources suggest that India might be close to a mini deal, and Bessent mentioned progress with the European Union.