- The EUR/USD pair experiences a slight decline, trading around the 1.1415 mark in the early hours of Tuesday’s Asian trading session.
- According to Bessent, the onus is on China to ease tensions in the ongoing trade dispute.
- Market participants are increasingly anticipating potential interest rate decreases by the ECB.
EUR/USD is trading slightly lower, hovering near the 1.1415 level during the initial hours of Tuesday’s Asian session. The euro is exhibiting weakness against the U.S. dollar as expectations grow for additional rate cuts from the ECB in June. Market participants are keenly awaiting further developments regarding U.S. trade policies, particularly in anticipation of the U.S. Nonfarm Payrolls report scheduled for release on Friday.
U.S. President Donald Trump indicated that progress has been made and that he has engaged in discussions with China’s President Xi Jinping, although Beijing has refuted claims of active trade negotiations. U.S. Treasury Secretary Scott Bessent acknowledged interactions with Chinese officials last week but made no mention of tariffs.
On Monday, Bessent stated that the U.S. government maintains communication with China, but emphasized that China must take the initiative to de-escalate the tariff conflict with the U.S., citing the trade imbalance between the two countries. Investors will be paying close attention to the U.S.-China relationship. The uncertainty surrounding Trump’s trade policies has diminished confidence in U.S. assets, leading to the euro becoming an attractive alternative for investors seeking to safeguard their capital. Any indications of heightened tensions in the U.S.-China trade situation could negatively impact the U.S. dollar and provide support for the EUR/USD currency pair.
