EUR/USD: Euro Collects Pips to $1.1650 as EU Leaders Meet Up to Discuss No-Deal Path with US

Forex markets are in for a ride this week as the August 1 tariff deadline looms. The EU is already thinking about rejecting Trump’s letter.

💶 Euro Firms as EU Plots Response

• The EURUSD pair edged up 0.2% early Monday to hover near $1.1650, as forex traders braced for a politically charged week. EU leaders are preparing for a high-stakes showdown over US tariff threats — and the common currency is catching a cautious bid.
• European representatives will meet this week to game out a response to Donald Trump’s latest hardline trade stance. The meeting agenda? Potentially rejecting the US President’s 30% blanket tariff letter on all EU imports.
• According to a weekend story by the Financial Times, Trump is pushing for 15–20% minimum tariffs in any trade deal and has dismissed the EU’s car tariff olive branch. The 25% auto duty stays — or possibly climbs.

📈 A Week Big on Macro

• Traders are watching the August 1 deadline like it’s a pattern in formation, with risks mounting that the US will go full steam ahead on tariffs if the EU doesn’t bend. The euro’s strength today hints at a bit of hope — or at least some pricing in of brinksmanship.
• The currency ticked up modestly, helped by light dollar weakness and the absence (so far) of an official EU retaliatory stance. But make no mistake — things could get volatile, fast.
• Add in positioning ahead of central bank events, and it’s clear: this week’s FX action won’t be for the faint-hearted.

🏛️ Central Bankers and Forex Markets

• Fed Chair Jerome Powell speaks Tuesday, and markets will parse every word for clues about the path of interest rates. The Fed has paused hikes, but sticky inflation and a relatively strong labor market keep the “higher for longer” camp alive.
• Later in the week, The European Central Bank is expected to hold rates at 2% on Thursday, keeping things steady while trade tensions simmer. Central bank officials have recently struck a more neutral tone, balancing slow growth with lingering inflation concerns.
• Between geopolitics and rate policy, the euro-dollar is heading into a week full of headlines. For traders, that means one thing: buckle up and watch for those trading opportunities.