Here’s a brief overview for Monday, July 28th:
The market is shifting into a riskier phase as we dive into a new week, with investors reacting positively to news about trade agreements between the U.S. and the European Union. Even though the economic calendar appears quiet today, the latter part of the week will bring significant central bank meetings and key data releases.
Current USD Performance
Today’s currency changes indicate the U.S. dollar (USD) is particularly strong against the Australian dollar. Below is the table illustrating the variations across various currencies.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.70% | 0.16% | 0.39% | 0.22% | 0.79% | 0.67% | 0.20% | |
| EUR | -0.70% | -0.57% | -0.28% | -0.48% | 0.09% | -0.02% | -0.50% | |
| GBP | -0.16% | 0.57% | 0.10% | 0.08% | 0.67% | 0.55% | 0.07% | |
| JPY | -0.39% | 0.28% | -0.10% | -0.16% | 0.35% | 0.27% | -0.05% | |
| CAD | -0.22% | 0.48% | -0.08% | 0.16% | 0.54% | 0.46% | -0.02% | |
| AUD | -0.79% | -0.09% | -0.67% | -0.35% | -0.54% | -0.12% | -0.59% | |
| NZD | -0.67% | 0.02% | -0.55% | -0.27% | -0.46% | 0.12% | -0.47% | |
| CHF | -0.20% | 0.50% | -0.07% | 0.05% | 0.02% | 0.59% | 0.47% |
In broader news, the European Union and the U.S. have reached a preliminary trade agreement, applying a 15% tariff on blankets. European Commission President Ursula von der Leyen mentioned on Sunday that the U.S. has committed to no retaliatory tariffs while promising $600 billion in additional spending. Stocks in the U.S. futures market climbed between 0.3% and 0.5% in the European session, with the U.S. Dollar index maintaining a positive trend around 98.00. Additionally, a report from South China Morning Post indicated that the tariff suspension between the U.S. and China is likely to extend for another three months, with a meeting scheduled for Monday in Stockholm between U.S. Treasury Secretary Scott Bescent and China’s deputy prime minister.
This Wednesday will see the U.S. Bureau of Economic Analysis offer its first estimate of Gross Domestic Product (GDP) growth for the second quarter, right before the Federal Reserve’s policy announcement.
The EUR/USD is anticipated to face significant bearish pressure today, likely remaining well below 1.1700. After a major loss last week, the GBP/USD is also likely to drop further, heading toward 1.3400.
As for gold, it seems to struggle to attract safe haven interest today, trading within tight limits below $3,350 in early European sessions.
The USD/JPY is expected to maintain its upward momentum, potentially hitting new weekly highs above 148.00. Following a rise of about 0.5% last Friday, the USD/CAD seems to continue this upward trend, looking towards 1.3750.
Meanwhile, the AUD/USD saw a sharp decline today, dropping below 0.6550 under pressure from widespread strength in the U.S. dollar.
Customs FAQ
Duties are applied to imports, intended to give local businesses a competitive edge. Tariffs help protect domestic producers by making imported goods more expensive, which is a common protectionist approach.
Both tariffs and taxes raise revenue for government services, but they differ in several ways. Customs duties are usually incurred at the port of entry, whereas taxes are assessed at the point of sale. Tariffs apply to imports, while taxes affect individual consumers and businesses.
Economists often debate the effectiveness of customs duties. Some believe they are essential for protecting industries and correcting trade disparities; however, others warn that they could lead to long-term adverse effects, escalating trade tensions.
Looking ahead to the 2024 presidential election, Donald Trump has clearly signaled his intention to use tariffs as a tool to bolster the U.S. economy and support domestic producers. In 2024, major sources of imports included Mexico, China, and Canada, with significant exports coming from Mexico. Trump’s tariff strategy may prioritize these countries and utilize generated revenue to cut personal income taxes.
