Euro Rebounds to $1.18

The euro hovered just below the $1.18 level as US President Donald Trump’s new 10% global tariff took effect, adding to trade tensions and dampening investor sentiment. The measure was implemented through an executive order signed last Friday, only hours after the US Supreme Court blocked several of the administration’s earlier import duties. According to Bloomberg, White House officials are drafting a formal order that could lift the tariff rate to 15%. Trump also warned that countries seeking to “play games” with existing trade agreements risk facing higher duties, following the European Parliament’s decision to pause progress on a trade deal with Washington until greater policy clarity emerges from US authorities. Investors are also turning their attention to upcoming inflation readings from Germany, France, and Spain for clearer signals on how the euro’s strength could influence price pressures and shape the policy path of the European Central Bank.

The euro extended its advance beyond $1.18, rebounding from last week’s one-month lows after the European Parliament paused the ratification process of the US-EU trade deal agreed with US President Donald Trump last July in Scotland. The move followed Trump’s announcement that he plans to raise a temporary import tariff from 10% to 15%, after the Supreme Court blocked his broader tariff measures. Uncertainty lingered over whether the new 15% rate would take effect imminently in the UK or EU, despite assurances from US Trade Representative Jamieson Greer that existing agreements with around 20 countries remain unchanged. The single currency was further supported by stronger-than-expected German business confidence, which climbed to a six-month high. Investors now await inflation data from Germany, France, and Spain for clearer signals on how euro strength may affect price pressures and the outlook for the European Central Bank.

The euro climbed back to $1.18, recovering from last week’s one-month lows as the USD weakened amid renewed uncertainty over US trade policy. Over the weekend, US President Donald Trump announced plans to raise a temporary tariff on imports from 10% to 15%, after the US Supreme Court blocked his broader tariff measures on Friday. EU Trade Commissioner Maroš Šefcovic met with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick as Brussels seeks clarity on Washington’s plans, while a senior EU lawmaker urged the European Parliament to delay a vote on legislation implementing the bloc’s side of the deal. The euro also drew support from stronger-than-expected German business morale, with sentiment hitting a six-month high. Investors now look ahead to inflation data from Germany, France, and Spain later this week for further clues on how euro strength could influence price pressures and the European Central Bank’s policy outlook.