The official also expressed optimism about a potential EU–US trade agreement, downplaying fears of retaliatory sanctions on Boeing aircraft or alcoholic beverages. However, as reported by the Financial Times, President Donald Trump is insisting on a minimum 15–20% import tax on European goods in any deal and a separate 25% levy on vehicles. Such conditions threaten to weigh on the European economy, making a near-term compromise elusive. Meanwhile, Federal Reserve Governor Christopher Waller—a noted advocate of rapid rate cuts—stated he would consider taking over as Fed Chair if asked by the president, but confirmed that Trump has not approached him so far.

Eurozone

The euro strengthened against the US dollar but weakened versus the yen and pound. Today, the European Central Bank released its latest quarterly business survey: the majority of respondents remain optimistic, though many note shrinking profits due to ongoing trade uncertainty. Notably, 8% reported higher turnover in the past three months, while 23% anticipate improvement next quarter. Roughly 30% of executives flagged concerns over raw material delays or component shortages, highlighting a need to shift supply chains and refocus sales on domestic markets. Businesses also revised their annual inflation expectations down from 2.9% to 2.5%.

United Kingdom

The pound lost ground to the yen but strengthened against the euro and dollar. July housing price data from Rightmove Group Ltd. showed the index falling from –0.3% to –1.2% month-on-month and from 0.8% to 0.1% year-on-year—the sharpest decline since data collection began in 2001. Analysts point to a decade-high inventory of listed properties, forcing sellers to lower prices to attract buyers. Despite sales volume outpacing 2024 by around 5%, forecasts for 2025 have been cut from 4.0% to 2.0%, or approximately 1.15 million homes, due to intense competition in the construction market.

Japan

The yen continued to strengthen across the board. Japan observed a national holiday today, resulting in thin trading as financial institutions remained closed. Traders are digesting the results of recent parliamentary elections, where the ruling coalition lost its majority in the upper house. Prime Minister Shigeru Ishiba has declined to resign, citing the imminent implementation of US tariffs. Analysts highlight that opposition parties—who favor lower taxes and increased social spending—resonated with voters frustrated by insufficient government action on rising living costs. Ishiba’s decision to stay on may embolden the Bank of Japan to maintain its hawkish trajectory, given his reputation as a proponent of tighter monetary policy.

Australia

The Australian dollar advanced against the US dollar but softened versus the euro, pound, and yen. Tomorrow at 03:30 (GMT+2), the Reserve Bank of Australia will publish minutes from its latest meeting. Earlier this month, the central bank disappointed investors by holding rates at 3.85% when markets had anticipated a dovish pivot. The upcoming report may provide clarity on the RBA’s direction, but most analysts now expect at least two more rate adjustments before year-end, in August and again late in the year.

Oil

Oil prices remain under pressure and continue to consolidate, as investors perceive the EU’s 18th sanctions package against Russia as too weak to meaningfully disrupt crude supplies. Experts believe Moscow has already adapted to the current regime, developing effective workarounds for Western restrictions. Moreover, enforcement—especially bans on products refined from Russian crude in third countries—remains a logistical challenge. Meanwhile, with the US tariff deadline for European imports looming and no deal yet signed, the risk of global recession and reduced energy demand continues to rise.