EUR/USD Slips Below 1.1700 as Traders Brace for US-EU Tariff Developments

EUR/USD Slips Below 1.1700 as Traders Brace for US-EU Tariff Developments

Published: July 11, 2025
Category: Forex | Trade & Policy

Euro Under Pressure Amid US Tariff Threats

The EUR/USD currency pair fell to around 1.1680 in Friday's Asian session, retreating from the 1.1700 threshold amid renewed trade tensions and policy caution from the European Central Bank (ECB).

Market participants reacted cautiously after US President Donald Trump announced that new tariff letters would be sent to EU member states "today or tomorrow," stirring concern over a potential US-EU trade war.

Trump’s Trade Actions Spook Markets

This week, Trump revealed sweeping tariff measures:

• 35% tariffs on Canadian imports
• 50% tariffs on Brazilian goods
• 50% copper import tariffs, effective August 1

The EU is the United States' largest trading partner, and any escalation in tariffs could weigh heavily on the Euro (EUR), which is already fragile due to diverging interest rate outlooks.

ECB Maintains Policy Caution

Adding to Euro weakness, ECB Governing Council Member Robert Holzmann said the central bank does not see the need for further rate cuts, despite subdued inflation. ECB officials Fabio Panetta and Piero Cipollone are scheduled to speak later today, and traders will listen closely for policy direction in light of global trade uncertainty.

Technical Outlook:

• Current Level: 1.1680
• Support: 1.1650
• Resistance: 1.1725
• Bias: Bearish (short-term)

Key Takeaways:

• EUR/USD weakens amid looming US-EU tariff decisions.
• Trump’s tariff letters could spark further volatility in Euro-related pairs.
• ECB commentary suggests limited policy easing ahead.