- The Euro regains lost ground with the US Dollar on retreat ahead of the US-China trade talks.
- ECB’s Kazimir suggested on Monday that the ECB’s easing cycle might be done
- The US Dollar rallied on Friday after strong NFP figures.
EUR/USD has opened the week on a moderately positive note on Monday, following a significant decline on Friday. The pair is currently trading at 1.1415, having bottomed at 1.1370 on Friday, favoured by a softer US Dollar (USD) and hawkish comments by the European Central Bank member, Peter Kazimir.
The Eurozone economy is still facing downside risk, said Kazimir, but inflationary pressures are increasing, which, according to the ECB official, suggests that the bank would already be done with monetary easing, “if not at the end of the cycle.” In the absence of relevant releases, these comments have contributed to the Euro recovery,
The US Dollar (USD), on the other hand, is losing most of the ground taken after Friday’s upbeat US Nonfarm Payrolls (NFP) report. Data from the US Bureau of Labour Statistics showed on Friday that the US economy created more jobs than expected in May. The Unemployment Rate remained unchanged, and so did wage inflation.
These figures offset the gloomy market expectations, which followed a downbeat ADP employment report and soft manufacturing and services activity data seen earlier during the week. While some data in the employment report continued to highlight that the jobs market is cooling – the previous two months’ gains, for example, were downwardly revised – investors sent the US Dollar higher across the board.
The focus has turned to a US-China meeting, due later on Monday in London, where representatives from the worl’s two economies will try to revive the spirit of Geneva’s talks last month, which led to a significant reduction of the recirpcal tariffs and to a significant relief rally in financial markets.
The highlight of the week will be Wednesday’s US Consumer Price Index (CPI) release, which is expected to show the first impact of US President Donald Trump’s tariff policy on inflation and might help to determine the Federal Reserve’s (Fed) interest-rate path.
Euro PRICE Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.27% | -0.30% | -0.48% | -0.12% | -0.35% | -0.51% | -0.20% | |
| EUR | 0.27% | -0.05% | -0.23% | 0.14% | -0.06% | -0.26% | 0.05% | |
| GBP | 0.30% | 0.05% | -0.08% | 0.19% | 0.00% | -0.21% | 0.10% | |
| JPY | 0.48% | 0.23% | 0.08% | 0.36% | 0.08% | -0.10% | 0.15% | |
| CAD | 0.12% | -0.14% | -0.19% | -0.36% | -0.25% | -0.40% | -0.09% | |
| AUD | 0.35% | 0.06% | 0.00% | -0.08% | 0.25% | -0.20% | 0.11% | |
| NZD | 0.51% | 0.26% | 0.21% | 0.10% | 0.40% | 0.20% | 0.31% | |
| CHF | 0.20% | -0.05% | -0.10% | -0.15% | 0.09% | -0.11% | -0.31% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily digest market movers: The US Dollar jumped on strong US employment data
- US Nonfarm Payrolls increased by 139,000 in May, slightly beating market expectations of a 130,000 reading. Unemployment remained steady, at 4.2%, tackling fears of an increase to 4.3%, and wage inflation was unchanged at 3.9% against expectations of a decline to 3.7%.
- The overall picture shows a tight labor market with sticky wage inflation, which endorses the Federal Reserve’s most hawkish sector and dampens expectations of a rate cut in the coming months. This view is likely to limit the US Dollar’s weakness.
- The Federal Reserve is on its blackout period ahead of next week’s monetary policy meeting. Futures markets are not foreseeing significant chances of a rate cut: the next one isn’t seen at least until September, and markets expect between one and two cuts in the rest of the year, according to data from the CME Group’s Fed Watch Tool.
- In the Eurozone, also on Friday, the final reading of the first quarter’s Gross Domestic Product was revised higher to a 0.6% quarterly growth and a 1.5% yearly performance from previous estimations of 0.3% and 1.2%, respectively.
- Beyond that, Retail Sales figures showed that consumption grew by 0.1%, in line with expectations, and by 2.3% year-on-year, beating the market consensus of a 1.4% increase. The impact on the Euro, however, was marginal, as all eyes were on the US payrolls report.
- The calendar today is light with only the Eurozone Sentix Investors’ Confidence Index and some ECB policymakers providing some guidance for the Euro.
Technical analysis: EUR/USD looks for direction above 1.1400
EUR/USD is trading on a positive trend, printing higher highs and higher lows since mid-May, but the rejection at around 1.1500 seen last week and a bearish divergence on the 4-hour chart suggest that bulls might be losing steam.
Price action is heading higher on Monday, with bulls likely to be challenged at the June 3 high at 1.1455 ahead of the 1.1500 level.
On the downside, a bearish move below 1.1400 and the June 6 low at 1.1371 would give bears hopes of a deeper correction with potential targets at 1.1315 (May 30 low) and the 1.1215-1.1220 (May 20 and 28 lows).
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.