EUR/USD has posted considerable losses in the Tuesday session. Currently, the pair is trading at 1.1552, down 0.60% on the day. On the release front, the ECB Forum kicks off with a speech from ECB President Mario Draghi. In the eurozone, the current account surplus narrowed for a third straight month, dropping to EUR 28.4 billion. This fell short of the estimate of EUR 30.3 billion. In the U.S, the focus is on construction data. Building Permits is expected to remain pegged at 1.35 million for a third straight month. We’ll also get a look at Housing Starts, which is forecast to rise to 1.31 million. On Wednesday, Mario Draghi and Fed Chair Jerome Powell will participate in a panel at the European Forum. Germany releases PPI and the US publishes Housing Starts.
The euro is under strong pressure, EUR/USD is struggling to stay above the 1.15 level. The pair has declined 1.3% in the month of June. Investors are reacting negatively to the escalating trade war between China and the U.S, and if the tit-for-tat tariffs continue, the euro could continue to head south. The U.S announced a 25 percent tariff on $50 billion in Chinese goods on Friday. After China responded with an identical move on U.S. imports, President Trump has now threatened to impose 10 percent tariffs on some $200 billion in Chinese goods. Not surprisingly, China has threatened to retaliate to this latest move. Trump has vowed to take action on the $375 billion trade deficit that the U.S has with China, claiming that the latter is guilty of unfair trade practices. With the first of the U.S tariffs scheduled to take effect on July 6 and no signs that any side will blink first, the markets should be preparing for stormy weather ahead.
