Currency Markets Waver Amid Tariff Tensions and Inflation Concerns

The euro saw fluctuations on Monday, briefly hitting a three-week low before stabilizing, as markets largely dismissed the latest tariff threats from U.S. President Donald Trump ahead of crucial U.S. inflation data expected on Tuesday. Trump's proposed tariffs on imports from Mexico and the European Union, set to begin August 1, have so far failed to jolt traders.

Despite Trump's increased tariff threats, markets have shown resilience, with experts indicating that the initial shock has diminished. Joseph Trevisani, a senior analyst at FX Street, noted that the anticipated negative effects have not materialized significantly, reducing the focus on tariffs as a market-moving factor.

On the economic front, investors are closely monitoring upcoming inflation figures, with expectations of a rise in consumer prices. Meanwhile, Federal Reserve Chair Jerome Powell's comments suggest potential policy adjustments, although no immediate actions are anticipated until later in the fiscal year.

(With inputs from agencies.)