The euro rose slightly above $1.175, nearing its highest level since August 2021, as trade tensions eased after news that the US had proposed a deal to the EU maintaining a 10% baseline tariff, with exemptions for sensitive sectors such as aircraft and spirits. The EU is aiming to finalize a preliminary agreement with the US this week to lock in the 10% rate beyond the August 1 deadline while negotiations continue toward a permanent deal. Investor sentiment also improved after President Donald Trump spared the EU from additional tariffs ahead of the initial July 9 deadline. Meanwhile, the EU announced it was preparing retaliatory tariffs on a range of US products in response to US metal duties. Officials warned that if an agreement isn’t reached, further actions - such as export controls and restrictions on US access to public contracts - could be implemented. On the monetary policy front, markets are now pricing in just one more rate cut from the European Central Bank this year.