The euro declined in the European market on Wednesday against a basket of global currencies, resuming losses that had temporarily paused on Tuesday against the U.S. dollar. The currency edged closer to its lowest level in two weeks, following a renewed wave of trade-related statements from President Donald Trump, who recently imposed 25% tariffs on Japan and other trade partners.

According to European sources familiar with the matter, cited by Reuters, the European Union is unlikely to receive a tariff letter from the U.S. and may be granted exemptions from the standard 10% U.S. tariff rate.

Recent inflation data from Europe have increased uncertainty over the possibility of an interest rate cut by the European Central Bank in July, with markets awaiting more key economic data from the eurozone.

Price Action

The euro fell by 0.2% against the dollar to $1.1701, down from the days opening price of $1.1724. The currency recorded an intraday high of $1.1729.

On Tuesday, the euro closed up by 0.15% versus the dollar, having earlier touched a two-week low of $1.1682.

U.S. Dollar

The U.S. dollar index rose by more than 0.2% on Wednesday, resuming gains after a brief pause in the previous session. The index is now nearing a two-week high of 97.84, reflecting broad-based strength in the U.S. dollar against both major and minor currencies.

President Donald Trump announced on social media that there would be trade-related announcements on Wednesday involving "at least seven countries," without providing further details.

He also threatened to impose a 50% tariff on imported copper and reiterated long-standing threats of tariffs on semiconductors and pharmaceuticals.

Tariff Exemptions

European officials told Reuters that the EU is unlikely to be included in the new tariff directives and may receive exemptions from the standard 10% base U.S. tariff rate.

European Interest Rates

Headline inflation in Europe rose by 2.0% year-on-year in June, in line with market expectations, and up from a 1.9% increase in May.

According to Reuters, a clear majority at the European Central Bank's latest meeting favored keeping interest rates unchanged in July, with some members calling for a longer pause.

Money markets currently price in a 30% chance of a 25 basis point rate cut by the ECB in July.

To reassess these probabilities, investors are closely watching upcoming economic data from the eurozone, as well as comments from ECB policymakers.