The enthusiasm and relief that greeted Sunday’s last minute trade deal between the European Union and the United States proved fleeting on Monday. Yesterday, European exporters led a chorus of disapproval from the continent that led to a half-cent fall for the euro against the pound and an even larger fall against the US dollar.
A mixed day for the pound saw it strengthen against the euro but fail to erase the half a cent it lost to US dollar as news of the trade deal broke. The dollar meanwhile enjoyed its best day since May, which came after the latest deal with a major economy reduced the risk of a full-scale trade war.
There was a lot to pick over when it came to trade. In short, markets think that the high cost of doing business across the Atlantic will weigh on growth in Europe. European stock markets began Monday with a frenetic rally, but much like with the euro, this soon gave way to anxiety as criticism rolled in from various political parties. Even Spanish prime minister Pedro Sanchez brought himself to back the deal “without any enthusiasm”.
Donald Trump’s time in Scotland gave Sir Keir Starmer a chance to travel to Turnberry in an effort to put the final touches on the UK’s trade arrangements. There was no immediate payoff, but government officials remain hopeful that they can secure tariff exemptions for a number of key industries.
With the economic calendar light, focus was very much trained on the little corner of the Scottish coast suddenly transformed into the world’s diplomatic Mecca. President Trump said he planned to lay out 20% tariffs on all nations that his government has yet to reach a trade agreement with.
A more typical diet of data resumes today, as the eurozone heads into a busy stretch of economic growth figures.
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