- EUR/USD gains ground as ECB’s José Luis Escrivá said that he is satisfied with current interest rate levels.
- France’s Socialist Party leader Olivier Faure warned he would file a no-confidence motion if the government refuses to raise taxes on billionaires.
- The US Dollar may strengthen after reports that US and Chinese negotiators reached a consensus on key trade disputes.
EUR/USD remains stronger for the fourth successive session, trading around 1.1640 during the Asian hours on Monday. The pair edges higher as the Euro (EUR) receives support from after European Central Bank (ECB) Governing Council member José Luis Escrivá said on Sunday that he is satisfied with current settings for borrowing costs, while inflation is at target, per Bloomberg. Traders will observe German IFO Business Survey data later in the day.
However, the Euro could come under pressure as France’s Socialist Party leader, Olivier Faure, has threatened to topple Prime Minister Sébastien Lecornu’s government by Monday if the party’s budget demands are not met. Faure, whose party holds a decisive swing vote in the hung parliament, warned that he would submit a no-confidence motion unless higher taxes are imposed on billionaires, per Reuters.
The upside of the EUR/USD pair could be restrained as the US Dollar (USD) may gain ground following reports that United States (US) and Chinese negotiators have reached a consensus on major disputes. This development paves the way for Presidents Donald Trump and Xi Jinping to meet on Thursday to finalize a trade deal aimed at easing tensions. Officials in Malaysia announced after two days of talks that both sides had agreed on key issues, including export controls, fentanyl, and shipping levies.
US Treasury Secretary Scott Bessent told CBS News that President Trump’s threat to impose 100% tariffs on Chinese goods “is effectively off the table.” Bessent added that China has agreed to make “substantial” soybean purchases and to postpone its rare-earth export controls “for a year while they re-examine it.”
