Global tariff concerns remain a major driver in the market as trading enters the third week of July.
President Donald Trump has reportedly threatened to impose 30% tariffs on the European Union (EU) and Mexico starting on August 1.
August 1 marks the end of a 90-day extension of the April moratorium that ended on Wednesday (July 9).
Trump on Saturday announced the new tariffs in separate letters sent to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum in a post on his Truth Social media.
The EU and Mexico have called the tariffs unfair and disruptive, and the EU also said it would extend a moratorium on retaliatory US tariffs until early August to push for a resolution to the negotiations.
The euro fell to a 3-week low against the US dollar at the opening of trading earlier this week, around $1.16600.
In addition to the tariff issue, Trump on Sunday also repeated his threat to remove Federal Reserve (Fed) Chairman Jerome Powell, once again threatening the central bank's decision-making freedom with his push for lower interest rates.
The market is expected to get a clearer picture of the Fed's policy direction this week with the focus on US inflation data to be published.
The forecast for the US consumer price index (CPI) reading for June is back up to 2.6% from 2.4% the previous month.
As before, the market is placing expectations of a 50 basis point interest rate cut towards the end of 2025. However, the situation could change after assessing the latest data readings.
