The euro rose on Monday after the United States reached a framework trade agreement with the European Union.
U.S. President Donald Trump and European Commission President Ursula von der Leyen announced the deal during a meeting in Scotland on Sunday.
The deal will see a 15% tariff on EU goods imported into the U.S. – half of what Trump had threatened to impose from August 1.
“We are agreeing that the tariff straight across for automobiles and everything else will be a straight-across tariff of 15%,” Trump announced from Scotland. “So we have a tariff of 15%. We have the opening up of all of the European countries, which I think I could say were essentially closed.”
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Von der Leyen said Europe will also purchase $150 billion worth of U.S. energy as part of the deal, in addition to making $600 billion in other investments into the U.S.
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The framework deal is similar to one forged with Tokyo negotiators last week that will see Japan investing around $550 billion in the U.S. and a 15% tariff imposed on its cars and other imports.
By early Monday, the euro stood at around $1.18.
The latest development comes as investor attention is shifting towards corporate earnings and central bank meetings in the U.S. and Japan.
Rodrigo Catril, senior currency strategist at National Australia Bank, predicted this coming week could be positive, “just purely from the fact that now we know the rules of the game.”
“Now that there is more clarity, you would think that not only in the U.S., but around the globe, there will be a little bit more willingness to look at investment, to look at expansions, and to look at where the opportunities are,” Catril said on an NAB podcast.
Meanwhile, senior U.S. officials are expected to meet with their Chinese counterparts in Stockholm later Monday, aiming to extend a trade truce and prevent steep tariff hikes.
China is facing an August 12 deadline to reach a durable trade pact with the U.S. No breakthrough is expected in the U.S. and China talks in Stockholm, but analysts said another 90-day extension of a trade truce struck in mid-May was likely.
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The U.S. dollar advanced on Friday, bolstered by solid economic data that suggested the Federal Reserve could take its time in resuming interest rate cuts. Both the Fed and the Bank of Japan are expected to hold rates steady at this week’s policy meetings, but traders are focusing on the subsequent comments to gauge the timing of the next moves.
Fox News Digital’s Anders Hagstrom, Stephen Sorace and Reuters contributed to this report.
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