NEW YORK: Investors cautiously embraced news of a trade deal on Sunday (Jul 27) between the US and European Union that is expected to bring clarity for companies and some certainty to markets ahead of US President Donald Trump’s Friday tariffs deadline.
The euro rose against the US dollar, up 0.27 percent at US$1.177. The currency also gained 0.2 percent against both the pound and the Japanese yen.
Trump announced the United States has struck a framework trade deal with the EU that includes a 15 percent tariff on EU goods entering the US and significant EU purchases of US energy and military equipment.
European Commission President Ursula von der Leyen said the deal includes “cars, semiconductors and pharmas.”
The deal is similar to parts of the framework agreement the US clinched with Japan last week.
“It’s really in line with the Japan deal, and I assume investors will view it positively as they viewed the Japan deal,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
Optimism over easing trade tensions broadly helped push US stocks to record highs last week and lifted European shares to their highest since early June.
Trump’s Apr 2 “Liberation Day” announcement of sweeping global tariffs sent stocks plunging in the immediate aftermath, due to spiking fears about a recession that have since faded.
