Bitcoin Breaks $120K, Euro Falls on 30% EU Tariff

Bitcoin Breaks $120K, Euro Falls on 30% EU Tariff

The euro slipped after President Trump threatened to impose a 30% tariff on EU imports, casting doubt on any near-term resolution to trade tensions. S&P 500 futures were down around 0.4%, while European stock futures fell 0.7%, reflecting investor concern that the EU has limited room to make concessions. Trump also renewed his attacks on Federal Reserve Chair Jerome Powell, while Bitcoin continued its break into record high territory with a move above $120,000 for the first time.

Equities

The FTSE 100 fell 0.4% on Friday, pulling back from recent record highs as concerns grew over weak UK economic data and fresh trade tensions. Official figures showed the UK economy shrank for a second consecutive month in May, fuelling expectations of a Bank of England rate cut in August. Traders are now pricing in a 77.2% chance of a 25 basis point cut.

BP rose 3.4% to the top of the FTSE 100 after forecasting higher upstream production for the second quarter. The company’s update lifted energy stocks across the index, helped further by a jump in metals prices following threats from President Trump to raise tariffs on copper imports. Meanwhile, SSP Group dropped 8% after UBS downgraded the stock to “sell”, citing concerns over demand in its travel-focused food outlets. AstraZeneca was not mentioned in Friday’s trading update.

In the US, the S&P 500 slipped 0.33% to 6,259.75, retreating from a record high reached a day earlier. The Dow Jones fell 0.63% to 44,371.51, while the Nasdaq declined 0.22% to 20,585.53. Trade policy was again in focus after President Trump announced a 35% tariff on Canadian imports beginning next month, with further broad tariffs of 15% or 20% planned for other trading partners. This added to the 50% tariffs imposed on Brazilian imports the previous day.

Meta Platforms fell 1.3% after reports suggested it was unlikely to make further changes to its “pay-or-consent” data model, increasing the risk of EU antitrust action and potential daily fines. Nvidia rose 0.5% to a fresh record high, bringing its market value to $4.02 trillion. Levi Strauss gained 11% after raising its full-year sales and earnings forecasts, beating quarterly estimates and boosting sentiment in retail stocks. Kraft Heinz climbed 2.5% after the Wall Street Journal reported that the group is preparing to split up amid continued weakness in demand for its premium-priced food products.

Drone manufacturers AeroVironment and Kratos Defense rose around 11% after the US Defence Secretary ordered a sharp increase in drone production and deployment. For the week, the S&P 500 dipped 0.3%, the Dow lost 1%, and the Nasdaq edged down 0.1%.

Forex & Commodities

The US dollar strengthened on Monday after President Donald Trump threatened new 30% tariffs on imports from the European Union and Mexico, due to begin on 1 August. The euro dipped to a three-week low before trimming losses and was last down 0.13% at $1.1676. The Mexican peso also slipped, with the dollar rising 0.28% to 18.6763. Sterling edged lower by 0.15% to $1.3470.

The dollar’s gains were capped ahead of Tuesday’s US inflation data, which is expected to show a slight rise in consumer prices for June. Traders are currently pricing in just over 50 basis points of Federal Reserve rate cuts by the end of 2025. Trump repeated his criticism of Fed Chair Jerome Powell over the weekend, again calling for him to step down and urging the central bank to lower rates.

Gold rose to a three-week high as traders responded to tariff developments. Spot gold was up 0.1% at $3,359.69 per ounce. A sustained close above $3,360 could see prices move towards $3,435, according to analysts. Silver rose 1.5% to $38.93, while platinum and palladium fell 1% and 0.7% respectively.

Brent crude added 15 cents to $70.51 a barrel and West Texas Intermediate rose 14 cents to $68.59, building on Friday’s gains of more than 2%. Oil markets are watching for further US sanctions on Russia and a statement from Trump on the conflict in Ukraine. EU officials are close to agreeing on a lower price cap on Russian oil as part of a new sanctions package. Meanwhile, Saudi Arabia reported crude supply in June at 9.352 million barrels per day, in line with its OPEC+ quota. China’s oil imports rose 7.4% in June to 12.14 million barrels per day, the highest daily rate since August 2023.