The euro remains steady below 1.18, with trade risks and the European Central Bank's inaction dominating the trend.

The euro against the US dollar exchange rate remained below the 1.18 mark with narrow fluctuations, near its strongest level since August 2021. Market focus is shifting towards trade progress and signals from the European Central Bank. US President Trump announced that he would send formal notices of tariffs to trading partners, clearly stating the export tax rates to the US. This move signifies his abandonment of the commitment to reach multiple bilateral agreements before the tariff deadline on July 9th. The EU has stated its willingness to reach a trade agreement with the US, but also is preparing for a no-deal scenario. Regarding monetary policy, the market expects the ECB to only lower interest rates once more this year. After eight consecutive reductions in deposit rates since June 2024, officials have hinted that rates will remain unchanged at this month's meeting. The eurozone's inflation has reached the 2% target, but policymakers remain cautious in the face of global trade risks and the strengthening euro.