The euro fell to $1.16, its lowest level in around a month, under pressure from a slight rebound in the US dollar. The dollar's strength was supported by easing expectations of a Fed rate cut this year, following recent inflation data and after President Trump indicated he would not sack Fed Chairman Jerome Powell.

At the same time, markets remain focused on trade developments, with optimism persisting that an agreement between the US and the EU could be reached before August 1. President Trump announced 30% tariffs on EU imports starting next month, but then declared his readiness to negotiate. In response, the EU reaffirmed its commitment to a trade deal.

On the monetary policy front, investors broadly expect the ECB to keep interest rates unchanged at its meeting next week. However, markets are still anticipating a further 25bp cut later in the year. Eurozone inflation was confirmed at 2% year-on-year in June, with core inflation holding at 2.3%.