The trade agreement between the United States (US) and the European Union (EU) continues to impact market movements at the beginning of the European trading session on Monday (28/7/2025).
As noted in the previous Macro Overview, the agreement imposes a 15% import tariff on the EU starting August 1, significantly lower than the previous rate of 30%.
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The EU is the largest trading partner of the United States, and this trade agreement helps to avert a trade war that could threaten to slow down the global economy.
Market sentiment will likely remain influenced by this agreement during tonight’s trading, in addition to the release of data from the US. Here are the data points from Trading Central:
- Dallas Fed Manufacturing Index (Jul); forecast -8 vs previous forecast -12.7.
GOLD
The price of Gold (XAUUSD) briefly climbed to $3,345.27 per troy ounce at the start of the European session before experiencing a pullback. This movement indicates that Gold is still overshadowed by negative sentiment stemming from the US-EU trade agreement.
The agreement has improved market sentiment, making Gold, traditionally viewed as a safe haven asset, less appealing. This sentiment is likely to impact Gold’s performance during tonight’s trading.
OIL
The price of Oil (CLS10) rose at the beginning of the European session, reaching a daily high of $65.82 per barrel. Compared to Friday’s closing prices, Oil increased by 0.77%.
The positive sentiment for Oil is attributed to the US-EU trade agreement, which minimizes the risk of a trade conflict. This situation creates a more favorable global economic outlook, suggesting that demand for Oil could remain robust.
This positive sentiment is expected to continue influencing Oil movements during tonight’s trading.
EURUSD
EURUSD experienced a sharp decline at the outset of the European session, hitting a daily low of 1.16584. This represents a drop of 830 points (83 pips) compared to Friday’s closing.
The US-EU trade deal appears to have a more advantageous impact on the dollar. With the EU facing a 15% import tariff and needing to purchase more goods from the US, this could potentially help balance the trade deficit. Thus, the EU’s trade surplus with the US may diminish.
This scenario puts the US dollar in a favorable position, exerting downward pressure on EURUSD.
GBPUSD
GBPUSD fell to 1.34058 at the start of the European session after hitting a peak of 1.34526 earlier. The decline is driven by expectations of a forthcoming interest rate cut by the Bank of England (BoE), primarily due to the slowing UK economy.
This sentiment is likely to continue impacting GBPUSD during tonight’s trading.
USDJPY
The dollar surged following the US-EU trade agreement, reflected in USDJPY’s rise to 148.414. This is an increase of 764 points (76.4 pips) compared to Friday’s close.
As the EU is the largest trading partner of the US, avoiding a trade war suggests a more favorable economic outlook for the US. Additionally, the trade deficit between the US and the EU is expected to decrease.
This sentiment will likely continue impacting USDJPY during tonight’s trading.
Nasdaq
Nasdaq reached a record high of 23,584 at the start of the European session before correcting. The US-EU trade agreement provided positive sentiment to the stock index.
If the US economic data released tonight exceeds expectations, Nasdaq could experience further positive sentiment.
