- The EUR/USD exchange rate is encountering headwinds as the US Dollar appreciates, bolstered by indications of reduced friction between the United States and China.
- China has declared waivers on specific US goods from its previously imposed 25% duties, providing a ray of optimism for enhanced commercial ties.
- The European Central Bank is widely anticipated to maintain a cautious stance, fueled by growing anxieties that Eurozone price increases may not reach the bank’s desired 2% level.
EUR/USD is extending its decline for the second day in a row, hovering near 1.1360 in early Monday trading. The pair is facing downward pressure as the US Dollar (USD) gains traction, coinciding with signals of de-escalation in US-China relations.
On Friday, sources within the business community indicated that China had removed some US products from its list of goods subject to 25% tariffs. This action has sparked optimism that the protracted trade dispute between the world’s two leading economies could be nearing resolution.
Further supporting this view, US Agriculture Secretary Brooke Rollins stated on Sunday, as reported by Reuters, that the Trump administration is engaged in continuous dialogue with China concerning tariffs. Rollins highlighted the ongoing nature of these discussions and noted that trade deals with other nations were also “very close.”
