The advantage of the dollar against the main colleagues after the US-EU trade pact

The dollar obtained against large currencies including Euro and Yen on Monday with sentiment was appointed by a trade agreement between the US and the EU, which brought market certainty and prevent the global trade war.

US President Donald Trump and European Commission President Ursula Von Der Leyen reached a trade framework agreement, which provided import tariffs of 15% for European Union goods, half of the tariffs threatened by Trump from August 1.

It followed the US agreement last week with Japan, while US and Chinese economic officials will continue the talks at Stockholm on Monday which aims to extend the ceasefire for three months and maintain a higher higher rates.

The dollar rose against a safe Swiss franc, up 0.82% at 0.80155 FRANC. It rose against the Japanese Yen, up 0.29% at 148.12.

The last Euro fell 0.81% at $ 1,164275, determined for its biggest daily loss since mid -May, reversing the initial increase in the knee in Asian trade when the focus of investors shifted to what was meant by the tension of global trade for the dollar as a whole.

“While the power of USD today may reflect the perception that the US-EU agreement is new to the US, the power of the USD can also reflect the feeling that the US is involved with the EU and with its main allies,” said Wizman, Thierry Wizman, Global FX & Rates Strategy in the Macquarie Group, said in the investor’s record.

“Instead of ‘divorce’ between the US and its partners who appear to be predicted in February-June, the US and the main partner otherwise in ‘marriage counseling’, and thus still ‘talk about their feelings.'”

The dollar fell sharply earlier this year, especially against the euro, due to fears that the dramatic trade tariffs with most of the main partners will hurt the US economy causing investors to consider out of US assets.

Usually the gap between the results of government bonds is a major factor for currency movements, but currently the Euro is significantly higher than the gap between US yields and Euro zones.

“If you think about what we expect at the beginning of the year, no one really thinks that the Euro will be so strong. We all think that, especially after the release, that the dollar will remain strong,” said Anthi Tsouvali, a multi-asset strategy expert on UBS Wealth. “We continue to see the dollar weakened, it has a little consolidated but we think that in the long run it will be weaker.”

‘The Currency Market sighed in relief when the US and the EU reached a trade agreement.

Euro fell against Yen and Sterling, after reaching the highest one year in the Japanese currency and the highest two years in the pounds in early trading. ,

The dollar strengthened against the pound, which was 0.24% lower at $ 1,3422.

When concerns subsided about economic falling from punishing tariffs, investors’ attention shifted to company income and central bank meetings in the United States and Japan in the next few days.

Both the Fed and Bank of Japan are expected to maintain a stable tariff at this week’s policy meeting, but traders will watch the next comment to measure the next movement time.
Investors will also watch to see Trump’s reaction to The Fed’s decision.

The US president has placed the Fed under heavy pressure to cut significant interest rates, and Trump seemed almost trying to fire Powell last week, but withdraw with a nod of market disturbances that are likely to occur.

In addition, quarterly results will occur in the coming days of Apple, Microsoft, Amazon and Facebook Meta Platforms Meta.O, four of those that greatly affect the benchmark index.

They are important for currency investors if strong results cause the acceleration of flow back to US assets.

The arrow plot shows the total export value of the EU to the US in 2023 and 2024 with products that show an increase in pink and which shows a decrease in violet.

The arrow plot shows the total export value of the EU to the US in 2023 and 2024 with products that show an increase in pink and which shows a decrease in violet.
Source: Reuters (reporting by Rocky Swift in Tokyo and Alun John in London; Additional Reporting by Kevin Buckland; Editing by Kevin Liffey and Nick Zieminski)