EUR/USD extended gains on Thursday, rising toward 1.1750 during the Asian session as the US Dollar softened amid dovish Fed signals and renewed tariff jitters.
The latest FOMC minutes revealed growing consensus among Fed officials for potential rate cuts later this year, despite acknowledging that inflation risks from tariffs might be limited. Policymakers also noted that overall uncertainty—while still elevated—has eased slightly since the prior meeting.
Meanwhile, market sentiment was hit after President Trump announced new tariff letters imposing rates of 50% on Brazil, 30% on Algeria, Libya, Iraq, and Sri Lanka, and 20% on goods from the Philippines, effective August 1. However, the Euro found relief after the EU was spared from this round of tariff actions.
EU trade chief Maros Sefcovic indicated progress in talks with Washington, saying a trade framework deal could be finalized soon. The extension of the tariff deadline has added time for negotiations, further supporting EUR/USD.
With Fed policy leaning dovish and no immediate trade threat to the EU, EUR/USD maintains a bullish tone heading into the European session.
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