Euro at $1.17

The euro traded around $1.17, remaining near its highest levels since 2021, as traders continued to focus on ongoing trade developments. The US and the EU appear to be moving closer to a trade agreement. The EU trade chief stated that good progress had been made on a framework deal and that an agreement could be reached within days. Any potential deal is expected to include a baseline tariff of at least 10%, with possible carve-outs for key products such as Airbus aircraft. The euro has gained nearly 13% against the dollar so far this year, supported by broad dollar weakness amid concerns over President Trump’s tariffs and rising US debt levels. Investor sentiment has also been buoyed by renewed hopes for an economic revival, particularly following Germany’s shift toward more fiscal spending. On the monetary policy front, the ECB is widely expected to keep interest rates unchanged this month, but markets still anticipate at least one more reduction later this year.