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The euro opened with a small gap higher in early Asian trade, supported by the announcement of a framework trade deal between the EU and the US over the weekend. Gains were modest, with EUR/USD topping out near 1.1770 before drifting to around 1.1750/55 at the time of writing.
The deal, while still a framework with many details to be finalised, includes several key components:
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A 15% ceiling on tariffs for EU goods entering the US, which will be made permanent
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A commitment from the EU to purchase $750 billion worth of U.S. energy, reducing reliance on Russian supplies
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An additional $600 billion in EU investment into the U.S. economy
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No stacking tariffs or applying multiple rates
Reactions within the EU were mixed. Finland’s trade minister criticised the deal as unsustainable, while Germany’s Federation of German Wholesale, Foreign Trade and Services (BGA) trade lobby labelled it a “painful compromise.”
The euro’s move was echoed by modest gains in AUD, GBP, and NZD, while USD/JPY and USD/CHF traded in narrow ranges. Overall FX volatility remained low. Equities and crypto markets also edged higher in response to the firmer risk tone.
Elsewhere, U.S.–China trade talks are set to resume in Stockholm on Monday. While a breakthrough is not expected, negotiators are widely anticipated to extend the current tariff truce by another 90 days.
On the Japan–US trade front, NHK reported that Japan’s $550 billion U.S. investment plan will be largely loan- and guarantee-based, with only 1–2% in equity. Japanese negotiator Akazawa clarified that the U.S. share of 90% of profits, as cited by the White House, applies only to the equity portion — not the full investment package.
Asia-Pac stocks, Japan loses:
- Australia (S&P/ASX 200) +0.24%
- Hong Kong (Hang Seng) +0.48%
- Japan (Nikkei 225) -0.88%
- Shanghai Composite +0.03%
EUR/USD:
This article was written by Eamonn Sheridan at investinglive.com.