The EUR/USD pair edged lower for a second consecutive day on Friday, retreating from a near three-week high reached earlier. At the time of writing, the pair is hovering around the 1.1740 mark, down slightly by less than 0.10% on the day, with limited follow-through selling pressure.
Despite the European Central Bank’s (ECB) decision to leave interest rates unchanged on Thursday, the Euro continues to struggle amid ongoing trade uncertainties. White House spokesman Kush Desai dismissed speculation about a potential US-EU trade deal, stating that any such news should be considered mere speculation unless confirmed by President Donald Trump. His remarks cast doubt on earlier media reports suggesting that a trade agreement was close, adding pressure on the Euro.
Meanwhile, the US Dollar is gaining momentum for the second straight session, buoyed by stronger-than-expected economic data. On Thursday, US Initial Jobless Claims dropped to 217,000—the lowest level since mid-April—while S&P Global’s US Composite PMI signaled sustained business growth for the 30th consecutive month. These indicators reinforce expectations that the Federal Reserve will maintain current interest rates at its July 30 meeting, lending further support to the USD and dragging down the EUR/USD pair.
In a rare move, President Trump visited the Federal Reserve headquarters and urged Chair Jerome Powell to cut interest rates. Concerns are now emerging over potential political pressure on the Fed’s independence, which may discourage traders from placing aggressive long positions on the Dollar.
Moreover, the broadly positive market sentiment may limit further gains in the USD and help cushion the EUR/USD pair from deeper losses. Traders are advised to exercise caution before concluding that the recent upswing has peaked.
