Europe submits to Trump

logo18year
Daily Market Report
Currency insight from
Excel Currencies
banner1
waterman
Written by Dan Waterman
July 29th 2025
Who are the winners and losers in US-EU trade deal..

In the space of 24-hours (Sunday 3pm to Monday 3pm), GBP v EUR fell 0.8% and then went on to recover 1.1% later.

The largest daily loss AND gain since April (separate times) and this time it had nothing to do with Chancellor Reeves and the UK government.

This was down to weakness in the Euro, after EU Chief Ursula von der Leyen and US President Donald Trump announce a trade agreement has been reached.

Many EU leaders have spoken negatively of the deal, but I think that's more to do with being annoyed with Trump directly bringing this all to the table. The deal itself is 'bad' for the EU and very good for the US, there is no doubt about that. However, as all commentators have suggested, it could have been simply catastrophic for the European economy if nothing was signed.

Therefore, the first winners have to be, believe it or not, Europe. A 15% tariff has replaced a 4.8% one yes. But it would have been 30% in 3-days time..

The Euro has been devalued initially by 1% and I expect 1% more in time as re-positioning takes place in the market. 5%+ was the immediate expectation of a no-deal scenario.

Joint wins come in the frame of aviation and alcohol with friction-free trade and most importantly energy. The EU will purchase $1.3bn in US energy, replacing Russian oil and gas, a significant win for both.

Other wins include a stronger USD, financial markets (less uncertainty is good for business), US coffers seeing tens of billions added and of course for Trump, who delivers what he said he would.

The losers come in the form of US consumers who will see European import costs rise, German carmakers, Europe's solidarity and the EU is expecting a hit of 0.5% to its GDP.