EUR/USD Drops Below 1.1720 as US Tariff Letter Rollout Pressures Euro

EUR/USD Extends Decline Amid Trump Tariff Letters and Stronger US Dollar

Euro Weakens Despite Positive German Data as Risk Sentiment Turns

The EUR/USD currency pair is extending its downward correction, slipping below 1.1720 in Monday’s European session. The movement is largely driven by a resurgent US Dollar, supported by rising US Treasury yields and broad risk-off sentiment as the July 9 tariff deadline looms.

Investors are turning toward safe-haven assets, sending the US Dollar Index (DXY) higher and placing pressure on the Euro. The DXY is now trending above the pivotal 97.00 level.

Eurozone Data Fails to Offer Support

Despite a better-than-expected 1.2% increase in Germany’s Industrial Production for May, the Euro has failed to gain traction. Eurozone Retail Sales data, by contrast, were underwhelming, adding to the Euro's vulnerability.

The lack of significant upside reaction suggests that investors remain focused on external risks — especially from the US — rather than regional macroeconomic fundamentals.

Trump’s Tariff Letters Add Uncertainty

US President Donald Trump is expected to begin sending letters today to US trade partners, outlining the tariffs that will be imposed on their goods. The original July 9 deadline has created urgency in global markets, although comments by Treasury Secretary Scott Bessent suggesting an August 1 implementation have added ambiguity.

So far, only Vietnam, the UK, and China have reached deals with the US. However, China’s agreement was primarily a de-escalation measure, not a comprehensive trade deal.

Key Takeaways:

• EUR/USD trades below 1.1720 as USD gains strength
• Risk-off sentiment driven by US tariff deadlines
• German Industrial Production rise fails to lift Euro
• Markets await clarity on tariff timeline from Washington

Explore more forex updates on Tredu.com/forex