Euro Tumbles as Dollar Strengthens Amid Tariff Tensions
The euro fell while the dollar gained in response to U.S. tariff threats ahead of critical inflation data. Despite President Trump's tariff announcements, markets have mostly absorbed the news. Analysts expect steady inflation, with eyes on future U.S. interest rate cuts and fiscal policies.
The euro saw a dip on Monday, while the dollar gained traction against a basket of global currencies. This shift came as traders largely dismissed new tariff threats in anticipation of crucial U.S. inflation data set for release on Tuesday.
Despite President Donald Trump's weekend warning of a 30% tariff on imports from Mexico and the European Union beginning August 1, the market impact remains minimal. This muted response is attributed to the market's acclimation to ongoing tariff discussions, according to Joseph Trevisani, a senior analyst at FX Street.
Meanwhile, attention is fixed on U.S. inflation figures, with expectations pointing to an increase. Economists foresee headline inflation climbing to 2.7% annually, while core inflation could hit 3%. The outcomes are likely to influence Federal Reserve interest rate strategies, amid ongoing fiscal uncertainties and Trump's criticism of Federal Reserve Chair Jerome Powell.
(With inputs from agencies.)
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