Forex Today: Risk flows dominate markets ahead of key events
Here is what you need to know on Monday, July 28:
Markets turn risk -positive to begin the new week as investors cheers news of a trade deal between the United States (US) and the European Union (EU). The economic calendar will not offer any high-tier data on Monday but the second half of the week will feature key central bank meeting meetings and critical releases.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.70% | 0.16% | 0.39% | 0.22% | 0.79% | 0.67% | 0.20% | |
| EUR | -0.70% | -0.57% | -0.28% | -0.48% | 0.09% | -0.02% | -0.50% | |
| GBP | -0.16% | 0.57% | 0.10% | 0.08% | 0.67% | 0.55% | 0.07% | |
| JPY | -0.39% | 0.28% | -0.10% | -0.16% | 0.35% | 0.27% | -0.05% | |
| CAD | -0.22% | 0.48% | -0.08% | 0.16% | 0.54% | 0.46% | -0.02% | |
| AUD | -0.79% | -0.09% | -0.67% | -0.35% | -0.54% | -0.12% | -0.59% | |
| NZD | -0.67% | 0.02% | -0.55% | -0.27% | -0.46% | 0.12% | -0.47% | |
| CHF | -0.20% | 0.50% | -0.07% | 0.05% | 0.02% | 0.59% | 0.47% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The EU and the US have agreed on a framework trade deal that sets a blanket 15% tariffs on goods traded between them. European Commission President Ursula von der Leyen said on Sunday that the bloc agreed not to impose retaliatory tariffs and pledged $600 billion in investment in the US on top of existing expenditures. US stock index futures rise between 0.3% and 0.5% in the European session on Monday and the US Dollar (USD) Index stays in positive territory at around 98.00. In the meantime, the South China Morning Post (SCMP) reported on Sunday that the US and China are expected to extend their tariff truce by another three months. US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are scheduled to meet in Stockholm on Monday.
On Wednesday, the US Bureau of Economic Analysis will publish the first estimate of the Gross Domestic Product (GDP) growth for the second quarter before the Federal Reserve announces policy decisions later in the day.
EUR/USD stays under strong bearish pressure on Monday and trades deep in negative territory below 1.1700.
After posting large losses to wrap up the previous week, GBP/USD stays on the back foot early Monday and declines toward 1.3400.
Gold struggles to find demand as a safe haven on Monday and trades in a tight channel below $3,350 in the early European session.
USD/JPY preserves its bullish momentum and trades at a fresh weekly high above 148.00 early Monday.
After rising about 0.5% on Friday, USD/CAD continues to stretch higher and advances toward 1.3750 in the European morning.
AUD/USD declines sharply on Monday and trades below 0.6550, pressured by the broad-based USD strength.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
