OTTAWA (dpa-AFX) - The euro strengthened against other major currencies in the European session on Thursday, as European shares rallied following the implementation of Trump's extensive 'reciprocal' tariffs, which include a blanket 15% tax on exports from the EU.
The U.S. President Donald Trump's positive outlook on a Ukraine-Russia ceasefire also led to the upturn of EUR.
Trump had earlier enacted a 50% tariff on steel and aluminum, a 25% tax on vehicles and automotive components, and a 10% overarching levy on the majority of exports from the EU. These tariffs were in addition to the average rate of 4.8% on EU products that was already in place before Trump resumed his presidency in January.
Trump's 50% tariffs on steel and aluminum are still in effect, even though Brussels is continuing to advocate for a 'quota system' that would impose a lower rate on certain metal exports.
The standard 15% tariff is not presently imposed on car exports from the EU, even though both Washington and Brussels assert that automobiles fall under the blanket tariff. EU officials anticipate that Trump will enact an executive order in the next few days that reduces the auto tariff.
Items being examined under the specific 'Section 232' inquiry, such as pharmaceuticals and semiconductors, will maintain the existing 0% import duty from the US until the investigations are concluded.
Trump indicated yesterday that semiconductor exports to the US might soon incur a 100% tariff. He also mentioned earlier this week that pharmaceutical exports could eventually be subjected to tariffs reaching as high as 250%.
Both Washington and Brussels assert that EU pharmaceutical and chip exports fall under the 15% levy.
In economic releases, Germany's exports grew for the first time in three months in June despite falling shipments to the U.S., data from Destatis revealed. Exports advanced 0.8 percent on a monthly basis in June, reversing a fall of 1.4 percent in May.
Separate set of data revealed that German industrial output decreased 1.9 percent on a monthly basis in June, bigger than May's revised 0.1 percent drop and also worse than economists' forecast of 0.4 percent fall.
In the European trading today, the euro rose to nearly a 2-week high of 0.8744 against the pound, a 1-1/2-month high of 0.9429 against the Swiss franc and a 6-day high of 172.17 against the yen, from early lows of 0.8732, 0.9393 and 171.40, respectively. If the euro extends its uptrend, it is likely to find resistance around 0.89 against the pound, 0.95 against the franc and 174.00 against the yen.
Against the U.S. and the Canadian dollars, the euro advanced to near 2-week highs of 1.1698 and 1.6054 from early lows of 1.1650 and 1.6010, respectively. The euro may test resistance around 1.19 against the greenback and 1.62 against the loonie.
Looking ahead, U.S. weekly jobless claims data, Canada Ivey PMI for July, U.S. wholesale inventories for June, U.S. consumer inflation expectations for July and consumer credit change for June are slated for release in the New York session.
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