USD ticked higher after the US and EUR agreed on a 15% import tariff deal, down from the threatened 30% figure. The agreement eased trade war fears but paradoxically lifted the greenback, as risk uncertainty faded and yield differentials regained importance.
EUR came under pressure, falling roughly 0.7% as the initial knee‑jerk gains unwound and investors sold the EUR into strength, interpreting the deal in favour of the US and, thus, USD friendly.
*Daily move - against G10 rates at 7:00 am, 29.07.25
** Indicative rates - interbank rates at 7:00 am, 29.07.25
It seems like USD is back in control, benefitting from reduced trade uncertainty. Following on from the deal announced with the EU yesterday, US - China talks are underway in Stockholm and US Commerce Secretary Howard Lutnick said a 90-day extension of a trade truce with China was a likely outcome. Those USD moves are continuing this morning, ahead of JOLTS job opening numbers today. It is worth noting that GBPUSD closed below a key support of the June and prior July low, suggesting further downside could be seen on the pair.
Data this morning showed that UK food inflation rose 4% in July year-on-year to a 17-month high, once again highlighting the pressure on households and the underlying concerns over the UK economy. As mentioned yesterday, we a have data heavy week for USD, given we have the FOMC meeting tomorrow and nonfarm payrolls on Friday.
EURUSD suffered its biggest daily decline since mid-May, with that move continuing today, going through the June and July support levels. That decline in the EUR helped GBPEUR bounce off of the Nov 2023 low – further upside could be seen on the pair should markets continue to weaken the EUR ahead of GDP numbers tomorrow and CPI on Friday from the region.
Read more about the JOLTS report and FOMC meeting here:
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Over the last 19 years we’ve helped over a million customers and last year alone processed over £12bn. We’re tried and trusted, and we’re ready to help you.
Have a great day.
