The euro rose in the European market on Tuesday against a basket of global currencies, beginning to recover from a two-week low against the U.S. dollar, as renewed recession fears in the United States emerged after Donald Trump announced 25% tariffs on goods imported from Japan and South Korea, in the latest development of his chaotic trade war.

Recent key inflation data from Europe has increased uncertainty around the likelihood of a European rate cut in July, as investors await more important economic releases from the eurozone.

The Price

EUR/USD exchange rate today: The euro rose against the dollar by 0.5% to ($1.1765), from the opening price of ($1.1708), with a session low at ($1.1706).

The euro ended Mondays session down by 0.55% against the dollar, marking the third loss in the past four days, and hitting a two-week low at $1.1686.

U.S. Dollar

The U.S. dollar index fell on Tuesday by 0.35%, retreating from a two-week high at 97.67 points, reflecting a renewed decline in the U.S. currency against a basket of major and minor currencies.

Aside from profit-taking, the U.S. dollar is also weakening due to renewed concerns about a potential recession in the U.S. economy, after President Donald Trump revealed 25% tariffs on goods imported from Japan and South Korea, in the latest twist in his chaotic trade war.

Trump has begun informing his trade partners from major suppliers like Japan and South Korea to smaller nations that sharply higher U.S. tariffs will begin on August 1, later stating that he is open to an extension if countries present proposals.

Opinions and Analysis

Carol Kong, currency strategist at the Commonwealth Bank of Australia, said: "Theres still a lot of uncertainty around where tariff rates will ultimately land, and which countries will get which rates, so global economic uncertainty remains elevated, and that will keep investors in a wait-and-see mode for now."

Kong added: "This is just the beginning, and well definitely see more major trade headlines over the coming days."

European Interest Rates

Headline CPI in Europe rose by 2.0% year-on-year in June, matching market expectations, after a 1.9% increase in May.

According to Reuters sources, a clear majority at the latest European Central Bank meeting expressed a preference to keep interest rates unchanged in July, with some members calling for a longer pause.

Money market pricing for a 25-basis-point rate cut by the European Central Bank in July remains steady at around 30%.

To reassess these expectations, investors will be closely monitoring a range of upcoming economic data releases in Europe, along with commentary from ECB officials.