The EUR/USD pair experienced a decline, trading near 1.1360 during Monday’s Asian session, despite a weakening US Dollar. This movement follows two consecutive sessions of gains. Market sentiment was negatively impacted by escalating trade tensions between the United States and China. China’s Ministry of Finance recently increased tariffs on US goods in response to the US raising tariffs on Chinese imports. In an effort to mitigate trade friction, the European Union announced a temporary suspension of planned retaliatory tariffs, mirroring a similar action by the US to facilitate renewed negotiations. Concerns regarding the potential for an accelerated financial crisis due to US trade policies were voiced by German Chancellor-in-waiting Friedrich Merz, who also advocated for a new transatlantic trade agreement. Federal Reserve official Kashkari indicated that the economic consequences of the trade conflict are contingent upon the resolution of trade uncertainties.
