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EUR/USD recovers above 1.1250 as the US Dollar retreats from almost a month’s high.. Investors focus on the US-China trade talks on Saturday, with US Lutnick saying he is confident of a de-escalation in the Sino-US trade war. ECB Rehn says that the Eurozone’s disinflation trend is intact and the economic outlook is grim. EUR/USD rebounds to near 1.1260 during European trading hours on Friday from over a three-week low around 1.1200 earlier in the day. The major currency pair bounces back as the US Dollar (USD) retraces amid caution ahead of the trade talks between the United States (US) and China due on Saturday. The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, corrects to near 100.40 from almost a month high of 100.85 posted earlier in the day.  Investors will pay close attention to the US-China trade discussions in Switzerland on Saturday. China is the second largest market of US imports after Mexico, according to the US COMTRADE database on international trade. Additionally, the trade war between Washington and Beijing is the key trigger behind downward revisions in global economic growth, given the labor cost competitive advantage of China. The White House has expressed confidence that the tariff war between the US and China will de-escalate after the meeting. “De-escalation and bringing rates down are the goal for China,” US Commerce Secretary Howard Lutnick said in an interview with CNBC on Thursday. Lutnick also demonstrated confidence that Washington will “roll out more deals over the next month”. His comments came after the announcement of the US-United Kingdom (UK) trade deal. Meanwhile, The New York Post reported that US President Donald Trump could lower tariffs on China to the range between 50% and 54% as early as next week. However, White House spokesperson Kush…

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Filed under: News - @ May 9, 2025 11:22 am