Eurozone: Euro Resilient Despite Tariff Threats

The euro shows notable strength against major currencies such as the yen, pound, and even the US dollar, despite imminent threats from raised US tariffs. European Commission President Ursula von der Leyen criticized the White House's trade measures as disruptive to transatlantic supply chains, adversely impacting businesses and consumers across both continents. European Commissioner for Trade Maroš Šefčovič added to these concerns, highlighting potential risks of irreversible damage to trade relationships.

The EU has already prepared countermeasures, with Italian Foreign Minister Antonio Tajani revealing a contingency list of tariffs worth €21 billion on US goods. Continued uncertainty around these trade tensions could significantly increase market volatility in coming weeks.

UK: Sterling Weakens Amid Monetary Policy Uncertainty

The British pound is declining against the euro and exhibits mixed performance against the yen and dollar. The market closely watches comments from Bank of England Governor Andrew Bailey, who hinted at potential monetary easing if labor market conditions continue to deteriorate, despite his belief in eventual normalization of monetary policy and interest rate reductions later this year.

Japan: Yen Pressured by Weak Industrial Data and Inflation Concerns

The Japanese yen weakens against the euro and displays mixed trends against the dollar and pound. Recent data revealed industrial production dipping by 0.1% in May against a forecasted increase of 0.5%, while machinery orders fell less than expected. The looming US tariffs threaten further disruptions, possibly extending the Bank of Japan's cautious stance on tightening monetary policy. Meanwhile, household surveys indicate heightened inflation expectations, with anticipated consumer price growth rising to 12.8% from 12.2%, highlighting long-term pessimism among Japanese consumers.

Australia: AUD Struggles Amid External Pressures

The Australian dollar is losing ground against the euro and US dollar, exhibiting mixed movements against yen and pound. With no substantial domestic economic releases, market sentiment is guided primarily by external developments. Notably, Prime Minister Anthony Albanese's recent visit to China emphasizes stronger bilateral cooperation on environmental standards in steel production, addressing China's production overcapacity issues.

Crude Oil Market Mixed Amid Global Trade Uncertainty

Oil prices show mixed trends influenced by conflicting factors. Supporting the market is positive Chinese export data, showing a 5.8% increase in June, driven largely by higher demand from Southeast Asia (up 16.8%) and the Eurozone (up 7.6%). However, bullish momentum remains capped by the specter of intensifying trade wars following US tariff hikes, raising concerns of potential global economic downturn and dampening global energy demand.