EUR/USD Slips Below 1.1750 as Trade Tensions and Stronger Dollar Weigh on Euro

The EUR/USD pair edged lower for a second straight session on Friday, drifting away from Thursday’s three-week high as renewed trade uncertainty and steady U.S. Dollar demand pressured the Euro. At the time of writing, the pair is trading near 1.1740, down 0.10% intraday.

Euro Struggles Despite ECB Hold as Trade Doubts Linger

The European Central Bank’s decision to keep interest rates unchanged on Thursday failed to lift the Euro meaningfully. Investor sentiment remains cautious as uncertainty surrounds the progress of a potential EU-U.S. trade agreement. White House spokesperson Kush Desai cast doubt on recent reports of a nearing deal, stating that no agreement should be considered final unless confirmed by President Donald Trump. This added pressure to the Euro, which has struggled to build bullish momentum in recent days.

U.S. Dollar Supported by Strong Data, Fed Rate Hold Expectations

The U.S. Dollar extended gains for the second session, buoyed by Thursday’s solid economic data. U.S. Initial Jobless Claims dropped to 217,000 — the lowest since mid-April — while S&P Global’s Composite PMI confirmed continued business expansion for the 30th consecutive month. These robust figures reinforced expectations that the Federal Reserve will hold rates steady at its upcoming July 30 policy meeting, lending further support to the greenback.

Fed Independence in Focus Amid Trump Pressure

Adding a layer of complexity, President Trump reportedly visited the Federal Reserve and pressured Chair Jerome Powell to lower interest rates. This rare presidential intervention raised concerns about the Fed’s independence and could limit aggressive Dollar buying in the near term.

Outlook: Mixed Fundamentals Call for Caution

While EUR/USD remains under slight bearish pressure, the broader picture is more nuanced. The combination of persistent trade concerns, political interference risks, and mixed market sentiment may limit both downside and upside moves in the near term. Traders are advised to stay cautious as the pair hovers just below mid-1.1700s.

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