Euro Hits One-Month High as Trump Delays Tariffs on the EU
The U.S. dollar index, which tracks the currency against a basket of six major peers, was little changed at 99.06.
Quick overview
- The euro and British pound rose against the U.S. dollar following Trump's decision to delay tariffs on the EU.
- The euro reached a one-month high, climbing to $1.1418, while the pound hit its strongest level since February 2022.
- Investor mistrust toward U.S. assets is growing, contributing to the dollar's downward trend.
- Safe-haven currencies like the yen and Swiss franc initially traded lower but gained against the dollar amid improving market sentiment.
The euro and the British pound rose against the U.S. dollar on Monday following President Donald Trump’s decision to postpone imposing tariffs on the European Union.
The move came amid growing investor mistrust toward U.S. assets and a rising appetite for European currencies.
The euro reached a one-month high against the dollar after Trump backed down from his threat to impose 50% tariffs on EU imports starting June 1, with the bloc requesting more time to “reach a good agreement.”
The dollar continued its downward trend, weighed down by Trump’s policy reversals and the sweeping tax cuts and spending plans, which have further driven investors away from U.S. assets.
The euro rose as much as 0.55%, hitting $1.1418—its highest level since April 29. It later pared gains but was still up 0.17% at $1.1375, bringing its year-to-date gains to 10%. The pound climbed as much as 0.39%, reaching its strongest level since February 2022, and later settled 0.1% higher at $1.356.
Safe-Haven Currencies React
Safe-haven currencies like the yen and Swiss franc initially traded lower amid improving market sentiment but still gained ground against the dollar. The greenback slipped 0.24% against the yen to 142.23, its weakest level in a month, and hit a two-and-a-half-week low of 0.8193 against the Swiss franc. The U.S. dollar index, which tracks the currency against a basket of six major peers, was little changed at 99.06.
Trump announced the tariff delay on Sunday after a phone call with European Commission President Ursula von der Leyen, who requested additional time to reach a deal. While the news provided some relief to investors, it also served as a stark reminder of how abruptly U.S. trade policy can shift.
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