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3w ago

U.S.-EU Tariff Cap Spurs Equity Gains but Fuels Peso Volatility

Modest market gains from the tariff cap are overshadowed by a surging dollar that has sent the Mexican peso tumbling, pushing Argentina’s currency to fresh lows

Juan Grabois y Sebastián Galmarini
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La Terminal Especializada de Automóviles del Puerto de Lázaro Cárdenas Es la primera y única terminal en México (y una de las más modernas de Latinoamérica) dedicada exclusivamente al manejo de vehículos, lo que agiliza las operaciones de carga y descarga de buques.
El presidente de Estados Unidos, Donald Trump, y la presidenta de la Comisión Europea, Ursula von der Leyen, se dan la mano después de llegar a un acuerdo para resolver una disputa comercial sobre el aumento de aranceles

Overview

  • The United States and European Union formalized on July 27 a 15% cap on most tariffs, averting a planned rise to 30% and securing $600 billion in EU investments alongside $750 billion in U.S. energy and defense purchases.
  • Euro Stoxx 50, DAX and CAC 40 futures jumped over 1% on July 28, but volatility returned on July 29 as investors weighed ongoing protectionist risks.
  • The U.S. dollar index climbed about 1.07%, driving the Mexican peso down roughly 1.17% to 18.76 per dollar on July 28.
  • Argentina’s peso breached ARS 1,300 per dollar after President Javier Milei announced permanent cuts to agricultural export duties over the weekend.
  • Banco Central de la República Argentina intervened in currency futures and repos to support the peso despite meager agro liquidations and ongoing IMF loan reviews.