The euro declined in the European market on Monday against a basket of global currencies, resuming losses that had paused briefly on Friday against the U.S. dollar. The currency retreated from its four-year high due to corrective movements and profit-taking.

The U.S. dollar strengthened as the 90-day deadline set by President Donald Trump to impose reciprocal tariffs approaches this Wednesday. So far, only the United Kingdom, China, and Vietnam have agreed to any form of trade deal with the White House.

Recently released key inflation data from Europe has increased uncertainty around the likelihood of a European interest rate cut in July, as markets await further important economic figures from the eurozone.

The Price

The euro fell against the dollar by 0.15% to $1.1763, down from the opening level of $1.1778. It recorded a high of $1.1790.

The euro ended Fridays session with a gain of over 0.1%, resuming a two-day uptrend that had paused due to profit-taking from its four-year high at $1.1830.

Over the past week, the euro gained 0.45% against the dollar, marking its second consecutive weekly advance.

U.S. Dollar

The U.S. Dollar Index rose by 0.15% on Monday, resuming gains that had briefly paused on Friday. The index is on the verge of reaching its highest level in several weeks, reflecting the dollars broad strength against a basket of major and minor currencies.

The dollars rise comes amid market anticipation of headline developments on trade, with the Trump administrations tariff deadline looming.

Most of the United States trading partners are expected to face significantly higher tariffs once the 90-day grace period ends on "Liberation Day," this Wednesday. To date, only the United Kingdom, China, and Vietnam have signed any form of trade deal with the White House.

Opinions and Analysis

James Knifton, Head FX Dealer at Convera, said: Market volatility seems inevitable once the official pause ends and new tariff levels are announced.

He added: At the same time, the impact might be less severe this time. Unlike earlier announcements that exceeded expectations, the current proposals are largely anticipated. Furthermore, markets seem to be pricing in a likely extension of the deadline.

European Interest Rates

The eurozones Consumer Price Index rose by 2.0% year-on-year in June, in line with 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 even advocating for a longer pause.

Money market pricing for a 25-basis-point ECB rate cut in July currently stands at around 30%.