Euro Falls After US-EU Tariff Deal Favours Washington

The euro remained under pressure after Monday’s 1.3% fall, as traders reacted to a US-EU trade deal criticised by European leaders for favouring American interests. European stock futures edged slightly higher, while Wall Street ended mixed— the S&P 500 closed flat but secured a sixth consecutive record, and the Nasdaq rose 0.33%. Market attention turns to upcoming megacap earnings from Meta, Microsoft, Apple and Amazon, alongside today’s economic data and the start of the Federal Reserve’s policy meeting.

Equities

The FTSE 100 slipped 0.4% on Monday, reversing earlier gains as weakness in industrial stocks weighed on the index. The FTSE 250 dropped more sharply, down 0.8%. Pressure came from continued concerns over sluggish UK consumer demand, with British retail sales falling for the tenth consecutive month in July. Though the rate of decline eased compared to June, high prices continue to constrain household spending.

Industrial stocks led losses, with the sector index down 1.6%. RS Group dropped 3.1%, among the sharpest fallers in the group. Miners also declined, tracking lower commodity prices: precious metals stocks fell nearly 1%, while industrial miners were down 0.9%. However, energy shares supported the market.

BP rose 2.2%, making it the best-performing stock on the FTSE 100. The oil major benefited from a more than 2% rise in crude prices, helping offset broader declines in cyclical sectors. Meanwhile, Ocean Wilsons Holdings fell over 14% after agreeing to merge with Hansa Investment, forming a £900 million diversified investment firm.

In the US, the S&P 500 edged up 0.02% to close at a new record high for the sixth session in a row, while the Nasdaq gained 0.33% to finish at a fresh all-time high. The Dow Jones slipped 0.14%. Gains came despite choppy trading as investors assessed a new US-EU trade agreement. The deal, which imposes a 15% tariff on most EU goods and commits the EU to invest roughly $600 billion in the US, avoided a steeper tariff regime that had been planned.

Among major stocks, Nike climbed 3.89% following an upgrade from J.P. Morgan, which raised its rating to “overweight” and urged investors to “just buy it.” The energy sector was the strongest on the S&P 500, up 1.15%, helped by rising oil prices. On the other hand, real estate and materials lagged, down 1.75% and 1.44% respectively.

Forex & Commodities

The euro remained under pressure after falling 1.3% on Monday, its sharpest drop in over two months. The decline followed widespread criticism of the new US-EU trade deal, which imposes a 15% tariff on most EU goods. French and German leaders condemned the agreement, warning it would hurt exporters and economic growth. The euro was last trading marginally lower at $1.1584, while eurozone bond yields also fell.

The US dollar strengthened, rising 1% against a basket of currencies. It held firm on Tuesday, pushing the pound down to a two-month low of $1.3338. The yen edged up 0.2% to 148.22 per dollar. The dollar index stood steady at 98.66. Traders are now focused on central bank policy updates, with both the Federal Reserve and the Bank of Japan set to announce decisions this week. The Fed is expected to keep rates unchanged, though investors will watch closely for any shift in tone amid pressure from President Trump for looser policy.

Gold hovered near a three-week low at $3,318.71 per ounce as the stronger dollar reduced its appeal. Prices had dipped on Monday amid relief over the US-EU trade agreement and easing fears of a broader tariff war. Silver was steady at $38.18, while palladium slipped 1.7% to $1,225.44.

Oil prices held steady after rising more than 2% on Monday. Brent crude was flat at $70.05 a barrel, while US crude traded at $66.69. Brent had touched its highest level since July 18, helped by a provision in the US-EU deal for Europe to buy $750 billion worth of American energy over the coming years—though analysts remain sceptical about those targets. The oil market is also watching for updates from the Fed and the outcome of US-China trade talks, which resumed in Stockholm this week.