- The EUR/USD is expected to hover around 1.1790 during early European sessions on Tuesday.
- The US is reportedly pursuing narrower deals to secure agreements ahead of Trump’s tariff deadline.
- Germany’s inflation rate fell to 2.0% in June, which is softer than anticipated.
The EUR/USD pair is anticipated to trade on a downward trend near 1.1790 in the early European session on Tuesday. Due to rising financial apprehensions and uncertainties surrounding trade deals, the US dollar (USD) is facing a downturn against the euro (EUR). Later today, a preliminary report on June’s harmonized consumer prices (HICP) from the Eurozone and the US ISM manufacturing PMI will be in focus.
According to the Financial Times, US officials are looking for a more specific deal to sidestep the upcoming challenges posed by US tariffs. Sources close to the discussions mentioned that President Donald Trump’s administration is eager to finalize an agreement by the July 9 deadline, aiming for a step-by-step approach with the most willing countries. The continuing uncertainty regarding the trade agreement has kept market sentiment cautious, putting pressure on the dollar.
Concerns are arising among investors regarding the Senate’s efforts to pass Trump’s tax cuts and spending proposals. This financial anxiety has diminished optimism, contributing to a dip in the USD and providing a lift to the primary currency pair.
In Germany, preliminary data released on Monday indicated that inflation, measured by the Harmonized Index of Consumer Prices (HICP), had reduced year-over-year from 2.1% to 2.0%, which was softer than the expected 2.2%.
On a monthly basis, HICP increased by 0.1% in June, marking a decline from the previous rate of 0.2%, which was below market expectations of 0.3%. A lower-than-expected inflation figure from Germany could potentially benefit the euro in the short run.
