The currency markets maintained stability throughout Monday as investors ignored new U.S. tariff warnings to focus on the upcoming crucial inflation data release on Tuesday.
The market showed no significant reaction to President Donald Trump’s announcement about imposing 30% tariffs on Mexican and EU imports. The euro reached its lowest point in three weeks before stabilizing while the dollar index maintained a 97.87 value.
The market has lost its sensitivity to Trump’s tariff announcements because previous threats either got delayed or became less severe. FX Street’s Joseph Trevisani stated that the market no longer responds with surprise to Trump’s tariff threats.
The market now focuses on the upcoming U.S. consumer price data which will be released in June. The forecast indicates headline inflation will reach 2.7% while core inflation will achieve 3.0%. The inflation data will affect Federal Reserve decisions because markets predict two interest rate reductions this year with September being the first cut.
Meanwhile, global negotiations continue. The EU together with South Korea established agreements to reduce the impact of tariffs on their trade relations. The public speculation about potential leadership changes at the central bank emerged after Trump criticized Fed Chair Jerome Powell.
The euro reached $1.1691 with a 0.03% increase while the dollar showed a minor decline against the yen to 147.35. The Mexican peso experienced a 0.58% decline in value against the U.S. dollar.
