- EUR/USD faces challenges amid renewed Trump tariff concerns.
- US Treasury Secretary Scott Bessent warned that tariffs could be rolled back to April 2 levels on August 1.
- The EU Commission stated that it is close to finalizing a framework for a trade agreement with the United States.
EUR/USD edges lower after registering gains in the previous session, trading around 1.1780 during the Asian hours on Monday. The pair struggles due to renewed tariff concerns, driven by the comments from US Treasury Secretary Scott Bessent. Eurozone Retail Sales and German Industrial Production will be eyed later in the day.
Treasury Secretary Bessent said on Sunday that US President Donald Trump will send letters to some trading partners, warning that tariffs could revert to April 2 levels on August 1 if no progress is made on a trade deal. He clarified that August 1 is not another new tariff deadline but suggested that it could still give trading partners more time to renegotiate tariff rates.
Additionally, Commerce Secretary Howard Lutnick confirmed the new tariffs are set to take effect on August 1. Lutnick added that Trump is currently finalising the specific rates and agreements and may send out 12 or 15 letters on tariffs on Monday. He also indicated that trade deals or letters with most nations will be done by July 9.
The European Union (EU) Commission announced that it is nearing a framework for a trade agreement with the United States (US) to avoid the reintroduction of aggressive tariffs by the July 9 deadline. Also, Bloomberg reported that “Some European Union carmakers and capitals are pushing for an agreement with Trump that would allow for tariff relief in return for increasing investment in the US.
The downside of the EUR/USD pair could be restrained as the Euro (EUR) may appreciate due to hawkish comments from the European Central Bank (ECB) President Christine Lagarde. Lagarde said that “we will do whatever we must do to reach inflation target.”
Economic Indicator
Retail Sales (MoM)
The Retail Sales data, released by Eurostat on a monthly basis, measures the volume of retail sales in the Eurozone. It shows the performance of the retail sector in the short term, which accounts for around 5% of the total value added of the Eurozone economies. Retail Sales data is widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the MoM reading comparing sales volumes in the reference month with the prior month. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish
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Next release:
Mon Jul 07, 2025 09:00
Frequency:
Monthly
Consensus:
-0.7%
Previous:
0.1%
Source:
Eurostat