The dollar rose, supported by a US-EU trade agreement and easing global concerns.
The US dollar saw a notable rise against most global currencies during trading on Monday, July 28, following the announcement of a framework trade agreement between the United States and the European Union, which helped to calm fears of a full-blown trade war.
The agreement reached by US President Donald Trump with European Commission President Ursula von der Leyen stipulates imposing tariffs of 15% on some European products, a lower percentage than the previously threatened 30%, which helped to instill a sense of reassurance in the markets.
This improvement in trade relations comes after a similar agreement reached last week between Washington and Tokyo, and is also accompanied by the resumption of economic negotiations with China, which enhances optimism about the possibility of returning to a more stable trade environment.
This optimism was reflected in financial markets, with the dollar rising 1% against the Swiss franc to 0.80325 francs, climbing 0.59% against the Japanese yen to 148.535 yen, and also gaining against the British pound. Conversely, the euro fell 1.25% to $1.159125, marking its biggest daily loss since May, after a recent sharp rise. This decline is attributed to renewed investor appetite for the dollar as a safe haven, as trade tensions ease.
It is worth noting that the dollar had been under considerable pressure since the beginning of the year, due to concerns about the negative effects of tariffs on the US economy, but these recent agreements have restored some balance to confidence in the US currency.
With market attention shifting towards upcoming corporate earnings results and meetings of major central banks such as the Federal Reserve and the Bank of Japan, the dollar is expected to remain under close scrutiny in the coming days.
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