EUR/USD Rises Toward 1.1700 as Trump’s Tariff Threat Weakens US Dollar

EUR/USD Rebounds Toward 1.1700 Amid Trump Tariff Escalation and Dollar Weakness

Pair Reverses Three-Day Decline as Risk Sentiment Shifts

The EUR/USD pair rallied in Monday’s early Asian session, climbing near 1.1700 after snapping a three-day losing streak. The gains were fueled by a decline in the US Dollar (USD), which lost momentum on fears of escalating global trade tensions.

Trump Announces 30% Tariff on EU and Mexican Imports

On Saturday, former US President Donald Trump imposed a 30% tariff on EU and Mexican imports, effective August 1, further inflaming fears of a global trade war. Trump also floated the idea of a standard 15%-20% tariff across all US trading partners—up from the current 10%—as a leverage strategy for trade negotiations.

EU Opts for Strategic Patience, Delays Retaliation

In response, the European Union extended its suspension of retaliatory tariffs until early August, emphasizing a desire for diplomatic resolution. EU Commission President Ursula von der Leyen reaffirmed the bloc’s "two-track" approach: continuing dialogue while preparing countermeasures if talks fail.

💬 Von der Leyen: "We are not there yet, but we are ready if necessary."

Meanwhile, German Chancellor Friedrich Merz warned the proposed tariffs would strike "at the heart" of Germany’s economy, which relies heavily on exports.

🇪🇺 Explore More: How EU's Anti-Coercion Tool May Be Used

Technical View: EUR/USD Faces Resistance at 1.1725

EUR/USD now tests the 1.1700 psychological level, with short-term resistance near 1.1725 and support at 1.1640. Momentum could remain bullish if trade war rhetoric slows and risk appetite stabilizes.

Conclusion: EUR/USD Lifted by Tariff Turbulence and Dollar Dip

As Trump’s aggressive tariff strategy pressures the Greenback, EUR/USD could find short-term support. However, the outlook remains fragile, depending heavily on EU-US trade talks and further geopolitical developments.