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2025-08-02 19:59:27
The Eurozone is caught in a "double bind," with the US-EU trade agreement unbalanced. Can the euro still hold up? ⑴ The US and the EU reached a framework for a trade agreement, but the market generally sees the deal as unfavorable to the EU. ⑵ Under the agreement, EU products entering the US will face a 15% tariff, with tariffs on steel, aluminum, and copper reaching as high as 50%. ⑶ In contrast, the EU will eliminate tariffs on US products. ⑷ The agreement also requires the EU to invest an additional $200 billion annually and purchase $250 billion in US energy products annually over the next three years. ⑸ Markets viewed the agreement as unfair to the EU, causing the euro to fall sharply against the US dollar after the agreement was announced. ⑹ Although the EU avoided the 30% tariffs that Trump had threatened, its trade opportunities with China may be limited. ⑺ Regarding monetary policy, the European Central Bank decided to keep interest rates unchanged, with markets expecting no rate hikes before the end of the year. ⑻ Macroeconomic data showed that eurozone GDP growth slowed significantly in the second quarter, but business conditions and economic sentiment improved in July. ⑼ Traders need to pay attention to the upcoming service industry PMI, PPI and retail sales data to find more clues about the direction of the Eurozone economy.
