- The EUR/USD pair is exhibiting range-bound behavior near the 1.1350 level as market participants await new signals regarding the commercial relationship between the United States and China.
- The European Central Bank is widely anticipated to implement another reduction in interest rates during its June policy meeting.
- ECB Governing Council member Knot anticipates short-term demand disruptions and a decline in inflation as a result of the tariffs imposed by the Trump administration.
The EUR/USD exchange rate is fluctuating within a narrow band around 1.1350 as the week commences. This primary currency pairing is stabilizing amid uncertainty surrounding the trade dialogue between the United States and China. Conflicting reports emanating from both Washington and Beijing concerning whether US President Donald Trump and Chinese President Xi Jinping have engaged in discussions about trade conditions have prompted investors to adopt a cautious stance.
President Trump has indicated that trade talks between Washington and Beijing are progressing favorably. However, China has refuted these assertions, declaring that there have been no “economic and trade negotiations between China and the US.” On Friday, a representative from the Chinese embassy communicated, “China and the US are not currently engaged in any consultation or negotiation regarding tariffs,” according to Reuters.
Following the statements from Beijing, Trump mentioned in an interview with Time Magazine that China’s Xi Jinping had contacted him. “He’s called,” Trump stated, further adding, “I don’t believe that indicates any weakness on his part.” Trump also clarified late Friday that Xi had made multiple calls since the unveiling of his tariff proposal. “I prefer not to comment extensively on that, but I have spoken with him on numerous occasions,” Trump conveyed to reporters, as reported by Reuters.
