Euro gains as investors cautiously welcome US-EU trade deal
The euro rose against the US dollar, up 0.27 percent at US$1.177. The currency also gained 0.2 percent against both the pound and the Japanese yen.
Trump announced the United States has struck a framework trade deal with the EU that includes a 15 percent tariff on EU goods entering the US and significant EU purchases of US energy and military equipment.
European Commission President Ursula von der Leyen said the deal includes "cars, semiconductors and pharmas."
The deal is similar to parts of the framework agreement the US clinched with Japan last week.
"It's really in line with the Japan deal, and I assume investors will view it positively as they viewed the Japan deal," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
Optimism over easing trade tensions broadly helped push US stocks to record highs last week and lifted European shares to their highest since early June.
Trump's Apr 2 "Liberation Day" announcement of sweeping global tariffs sent stocks plunging in the immediate aftermath, due to spiking fears about a recession that have since faded.
"I don't think equities in particular needed much of an excuse to rally and now they've got one," said Michael Brown, senior research strategist at Pepperstone in London.
Still, investors have been bracing for increased volatility heading into Aug 1, which the US has set as a deadline for raising levies on a broad swath of trading partners.
"We will need to see how long the sides stick to the deal. From a market perspective, it is reassuring in the sense that having a deal is better than not having a deal," Eric Winograd, chief economist at investment management firm AllianceBernstein, said about the EU agreement.
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