According to a news report in Reuters, European Commission President Ursula von der Leyen is set to meet U.S. President Donald Trump in efforts to hammer out a deal on tariffs and trade. President Trump has threatened a tariff of 30% on items imported into the United States from the European Union and if the EU wishes to avoid this August 1 fate, it will have to open up its doors to more US exports.
The EU and the U.S. are each other’s largest trade partners. Their trade accounts for one-third of the world’s trade.
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A thought that came to mind was the impact that a rise in tariffs could have on the demand for US debt. If EU exporting firms see a decrease in revenues and profits as a result of a reduction in demand for their items, this may mean less income for investment in U.S. Treasuries. If so, prices on U.S. bonds would fall and yields on this debt would rise. Increases in yields tend to correlate with dollar strengthening. In such a case, the EUR/USD would fall.
All speculation, yes. From a binary options perspective, the event of dollar strengthening would take place over a term longer than ones contemplated under typical binary options trading periods. From a monetary policy perspective, this scenario would not provide an incentive for the Federal Open Market Committee to lower rates in light of increased costs domestically for buying dollars.
As of 11:35 am EDT, x-rates.com reported the price on the EUR/USD at 1.1748.
Alton Drew
27 July 2025
For a legal analysis of this event, email your request to altondrew@altondrew.com.
Disclaimer: The above post is provided for informational purposes only. Trading involves risk. Please seek out a trading advisor prior to trading.
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