Markets rally, euro surges after EU rebuffs US trade deal
Euro Gains as US‑EU Trade Bid Solidifies
Stock markets rose across the globe following the announcement of a landmark trade agreement between the United States and the European Union. The deal, unveiled by President Donald Trump and Commission chief Ursula von der Leyen, pledges to avert a flare‑up that could threaten the world’s largest economies.
Key Details of the Agreement
- Both sides will apply a 15 percent tariff to EU exports entering the U.S. market.
- Britain, which relies heavily on automotive, pharmaceutical and semiconductor sectors, will see levies applied uniformly.
- Brussels will purchase $750 billion of U.S. energy and commit an additional $600 billion in investment.
- Trump emphasized the deal’s historic nature, stating it is “the biggest deal ever reached in any capacity.”
- von der Leyen highlighted the pact’s promise to bring stability and predictability to Atlantic businesses.
Market Reaction
The news gave the euro a lift, climbing to $1.1779 from Friday’s close of $1.1749. Equities followed the rally, buoyed by relief that Washington’s partners had reached agreements. Hong Kong led the winners, rising around one percent, joined by Shanghai, Sydney, Seoul, Wellington, Taipei and Jakarta. Tokyo fell for a second day, having surged about five percent on Wednesday and Thursday in reaction to Japan’s U.S. deal.
Future Outlook for Investors
- Traders anticipate a packed week of data releases, central bank decisions and earnings from tech giants such as Amazon, Apple, Meta and Microsoft.
- The Fed is expected to maintain current interest rates while sharing outlooks for the rest of the year amid Trump’s tariffs.
- The Bank of Japan is forecast to hold off on major moves in borrowing costs.
- August 12 marks the expiration of the 90‑day truce, following talks in Geneva in May.
Key Figures at 0230 GMT
- Tokyo – Nikkei 225: DOWN 0.7 % at 41,148.07 (break)
- Hong Kong – Hang Seng Index: UP 1.0 % at 25,631.28
- Shanghai – Composite: UP 0.3 % at 3,602.97
- Dollar/yen: UP at 147.74 yen from 147.68 yen on Friday
- Euro/dollar: UP at $1.1755 from $1.1738
- Pound/dollar: UP at $1.3436 from $1.3431
- Euro/pound: UP at 87.48 pence from 87.40 pence
- West Texas Intermediate: UP 0.5 % at $65.48 per barrel
- Brent North Sea Crude: UP 0.5 % at $68.80 per barrel
- New York – Dow: UP 0.5 % at 44,901.92 (close)
- London – FTSE 100: DOWN 0.2 % at 9,120.31 (close)
