- EUR/USD gains sharply to near 1.1270 as the US Dollar has been battered sharply after Moody’s Rating downgraded US Sovereign Credit to Aa1.
- Traders expect that the Fed is unlikely to cut interest rates in the next two policy meetings.
- Investors await the announcement of a potential EU-UK trade deal.
EUR/USD surges to near 1.1270 during European trading hours on Monday. The major currency pair strengthens as the Euro (EUR) outperforms its peers ahead of the announcement of a potential trade deal between the European Union (EU) and the United Kingdom (UK) later in the day, the first since the announcement of Brexit.
The EU and the UK are expected to announce a trade pact across various industries, such as defense, agriculture, and energy. Strengthening economic ties between Europe’s neighbouring economies at a time when the Eurozone inflation has come down significantly, the European Central Bank (ECB) has lowered its interest rates substantially, and the German economy is on a path of fiscal reforms, which is favorable for the continent’s growth outlook.
Additionally, the ECB is expected to reduce its interest rates further due to growing concerns over Eurozone growth and inflation. ECB policymaker and governor of the Belgian central bank, Pierre Wunsch, stated in an interview with the Financial Times (FT) over the weekend that interest rates would go slightly below 2% amid downside risks to inflation and growth. Wunsch warned that tariffs imposed by US President Trump have pushed “risks to inflation on the downside”. He ruled out the possibility of a “larger-than-usual interest rate cut” in the foreseeable future.
The next major trigger for the Euro will be trade talks between Washington and Brussels. Meanwhile, EU trade commissioner Maroš Šefčovič stated in an interview with the FT over the weekend that the continent intends to buy US gas, weapons, and agricultural products to cut the US-EU trade deficit. Šefčovič signaled that he would meet US trade representative Jamieson Greer next month at an OECD ministerial meeting in Paris.
Analysts at Capital Economics suspect that the trade deal between the EU and the US is imminent as Washington has not shown urgency in resolving trade disputes with the continent the way it has with China, Japan, and India. Another reason behind slower progress in US-EU trade talks is the difficulty for the continent in achieving consensus among the 27 member states.
Euro PRICE Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.95% | -0.71% | -0.22% | -0.20% | -0.66% | -0.51% | -0.39% | |
| EUR | 0.95% | -0.02% | 0.54% | 0.58% | 0.18% | 0.27% | 0.34% | |
| GBP | 0.71% | 0.02% | 0.27% | 0.62% | 0.20% | 0.29% | 0.35% | |
| JPY | 0.22% | -0.54% | -0.27% | 0.03% | -0.26% | -0.08% | -0.10% | |
| CAD | 0.20% | -0.58% | -0.62% | -0.03% | -0.44% | -0.31% | -0.24% | |
| AUD | 0.66% | -0.18% | -0.20% | 0.26% | 0.44% | 0.09% | 0.16% | |
| NZD | 0.51% | -0.27% | -0.29% | 0.08% | 0.31% | -0.09% | 0.07% | |
| CHF | 0.39% | -0.34% | -0.35% | 0.10% | 0.24% | -0.16% | -0.07% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
