It was a busy and eventful long weekend for markets, dominated again by President Trump’s trade policies. On Friday, Trump announced a bold move; imposing a 50% tariff on all EU imports starting June 1st.
Currency markets reacted immediately, with GBP/EUR rising above the key 1.19 level and EUR/USD dropping roughly 0.5%.
However, as we’ve come to expect from the Trump playbook, the situation quickly evolved. By Sunday evening, US and EU officials had reportedly engaged in discussions, resulting in a postponement of the proposed tariffs until July 9th. This swift diplomatic action has given markets a reason to switch back to “risk-on” mode, and it’s likely we’ll see Friday’s moves quickly retraced as trading resumes on Monday.
Though we face a shortened trading week due to the late-May holidays, market volatility is unlikely to ease.
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