FOREX: USD Breaks To August Lows as Markets Resolve Around Sept Fed Cut

• RXU5 has continued its decline after the EGB cash close, most recently touching a low of 129.85 (~70 ticks lower than pre-headline levels).
• Bloomberg reporting has more recently built on the FT piece five minutes ahead of the cash close re progress towards a US-EU trade deal.
• It takes it closer to support at 129.73 (Jul 21 low) after which lies 129.08 (Jul 4 low).

• US Data/Speaker Calendar (prior, estimate)
• 07/24 0830 Chicago Fed Nat Activity Index (-0.28, -0.15)
• 07/24 0830 Initial Jobless Claims (221k, 226k), Continuing Claims (1.956M, 1.954M)
• 07/24 0945 S&P Global US Mfg PMI (52.9, 52.7), Services PMI (52.9, 53.0)
• 07/24 1000 New Home Sales (623k, 650k), MoM (-13.7%, 4.3%)
• 07/24 1100 Kansas City Fed Mfg Activity (-2, 0)
• 07/24 1130 US Tsy $95B 4W & $85B 8W bill auctions
• 07/24 1300 US Tsy $21B 10Y TIPS auction (91282CNS6)
• 07/24 ----    Building Permits (1.397M, 1.397M), MoM (0.2%, 0.0%)
• Source: Bloomberg Finance L.P. / MNI

The Financial Times reports that the United States and European Union are closing in on a deal that would impose 15% tariffs on European imports, potentially heading off a threat issued by President Donald Trump earlier this month to hit the EU with a 30% tariff rate on August 1.  

• FT notes: "Both sides would waive tariffs on some products, including aircraft, spirits and medical devices... [sources] said they understood the 15 per cent minimum tariff would include those existing duties, so Brussels views the deal as cementing the status quo. Tariffs on cars, which are currently 27.5 per cent, would therefore fall to 15 per cent."
• FT adds: "The bloc will continue to prepare a possible €93bn package of retaliatory tariffs, set at up to 30 per cent, in case they cannot agree a deal by August 1, the people said. A US official said the situation was fluid and subject to change."
• Bloomberg reported earlier that, absent a trade deal by August 1, the EU would "quickly hit the US with 30% tariffs on some €100 billion ($117 billion) worth of goods." The first wave of countermeasures would combine "an already approved list of tariffs on €21 billion of US goods and a previously proposed list on an additional €72 billion of American products into one package".
• Trump said on Truth Social earlier: "I WILL ONLY LOWER TARIFFS IF A COUNTRY AGREES TO OPEN ITS MARKET. IF NOT, MUCH HIGHER TARIFFS!"