Monday saw the euro reach a one-month high versus the dollar as U.S. President Donald Trump withdrew his threat of imposing 50% charges on shipping from the European Union starting on June 1 after the group requested more time to “reach a good deal.”
Trump’s policy reversals and expansive spending and tax-cut program, which are currently in legislation, discouraged investors from investing in U.S. assets, causing the dollar to continue declining versus a wide range of foreign currencies.
According to Ray Attrill, director of FX analysis at National Australia Bank, “the ‘Sell America’ theme, which was clearly the dominant theme back in April, is back on show.” Markets have likely assumed—and likely correctly—that the final tariff scenario between the United States and the European Union will not be at 50%, but how we get there is now up in the air.
For the first time since April 29, the euro increased by as much as 0.55% to hit $1.1418. At $1.1394, it ended the day up 0.36%, bringing its annual gains to 10%. At $1.3574, sterling was up 0.25% for the day after rising 0.39% to its highest level since February 2022.
Even if market confidence improved, the Swiss franc and the safe-haven yen were generally sluggish but gained value relative to the US dollar. The greenback reached a 2-1/2-week low of 0.8193 franc, which fell as much as 0.24% to 142.23 yen, the lowest level this month.
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