Euro hits one-month high as Trump delays EU tariff threat

The euro climbed to a one-month high on Monday after US President Donald Trump backed down from his threat to impose 50 per cent tariffs on EU imports starting June 1, granting the bloc until July 9 to reach a trade agreement.

The single currency rose as much as 0.55 per cent to $1.1418, its highest since April 29, before easing slightly to $1.1394. Sterling also strengthened, hitting its highest level since February 2022 at $1.3574.

Trump’s decision, following a call with European Commission President Ursula von der Leyen, eased fears of a sharp escalation in transatlantic trade tensions and supported risk sentiment globally.

Safe-haven currencies such as the yen and Swiss franc were broadly weaker, though both appreciated against the dollar.

The US dollar index dropped 0.15 per cent to 98.93, extending last week’s 1.9 per cent slide, as investors moved away from US assets amid concerns over Trump’s shifting trade stance and a controversial tax and spending bill currently in Congress.

Analysts cautioned that while the delay calmed markets, uncertainty remains. “The brief respite from tariffs may be temporary,” Commerzbank’s Michael Pfister warned.

Attribution: Reuters
Subediting: M. S. Salama