EUR/USD edged lower in Asian trading on Monday, slipping to around 1.1690 after posting 0.5% gains in the previous session. While the pair is under mild pressure, the downside appears capped as the U.S. Dollar (USD) struggles under the weight of the Federal Reserve’s dovish policy expectations ahead of its September meeting. Traders are now awaiting the preliminary S&P Global PMI data from the U.S. later in the day for fresh direction.
Recent U.S. data has reinforced the case for a September rate cut. The University of Michigan’s Consumer Sentiment Index dropped to 58.6 in August, below July’s 61.7 and missing the 62.0 forecast. Retail Sales grew 0.5% in July, slowing from June’s 0.9% increase but matching market expectations. According to the CME FedWatch tool, money markets are pricing in nearly a 93% probability of a 25 basis-point cut next month.
Meanwhile, trade policy tensions remain in focus. The Trump administration has expanded its 50% tariffs on steel and aluminum imports, effective August 18, to include 407 new product codes under the U.S. Harmonized Tariff Schedule. President Trump also signaled further announcements on steel duties, alongside new levies targeting semiconductor imports.
On the geopolitical front, Trump said Saturday that Ukraine should seek a deal to end the war with Russia, stressing that “Russia is a very big power, and they’re not.” His remarks followed reports from a summit in Alaska suggesting Russian President Vladimir Putin had demanded additional Ukrainian territory, according to Reuters.
In Europe, upcoming inflation figures from Germany and the broader Eurozone will be closely watched, as they may influence expectations over whether the European Central Bank (ECB) pauses its easing cycle.
