It's clear that the Federal Reserve's hesitation to cut interest rates due to inflation risks at home is partly justified by the lack of substantive details in the trade agreements President Trump has concluded with several key trading partners. Trump's stream of announcements on trade deals has so far lacked specifics: key aspects remain under negotiation, and partners are sending mixed signals about what they've actually agreed to.
Last week, Trump promoted landmark deals with Japan and the European Union, supplementing them with agreements involving several smaller economies. Just yesterday, an extension of the tariff truce between the U.S. and China was also finalized.
Against this backdrop, the U.S. administration is celebrating, attributing success to Trump's negotiation style. "I think the trade deals are working very well—hopefully for everyone, but they're very, very good for the United States," the president stated on Tuesday.
However, while the scale of America's tariff wall is becoming clearer, many other details remain vague—especially the investments promised by counterparties, which on paper exceed 1 trillion dollars just from the EU and Japan deals.
According to several economists, Trump sees the capital pledges as a sign that his protectionist agenda is moving toward fulfilling its promises to revive U.S. manufacturing and create jobs. But if actual investments fall short of expectations, the tariffs may only raise government revenues and consumer and business costs—without achieving those broader goals.
Trump's agreement with Japan includes a 550-billion-dollar fund described by the U.S. as a "foreign investment commitment." However, Japanese officials stated that only 1–2% of the total—at most 11 billion dollars—would constitute direct investments, while the rest would essentially be loans. They also clarified that the profit-sharing arrangement of 90% in favor of America, touted by Trump's team, applies only to this smaller investment portion.
The EU also pledged 600 billion dollars in new investments. Yet European officials say this target merely aggregates company-level pledges, and the bloc cannot commit to achieving a specific figure. Neither side has provided details on what the commitments include.
The EU also promised to purchase 750 billion dollars' worth of U.S. energy over the next three years—roughly triple current levels. Some economists argue this goal may place additional pressure on both American exporters and European importers.
Beyond tariff rates, much of the recent trade activity is made up of vague promises involving large sums but lacking enforcement mechanisms. Many economists doubt whether these commitments will materialize as planned.
Even murkier is the U.S.–UK trade agreement. Information on this deal is scarce, raising more questions than answers. It follows a template similar to those signed with several other countries—light on details, heavy on announcements.
The fate of two other major U.S. trading partners also remains uncertain. Trump has downplayed the likelihood of a deal with Canada, although Canadian Prime Minister Mark Carney dismissed that suggestion. This week, both Canada and Mexico face the threat of new tariffs—but these would not apply universally. Goods that comply with the USMCA trade agreement will maintain their current tariff exemptions, offering some relief to both countries.
As for the reaction in the currency market, demand for the U.S. dollar is expected to remain steady, as it's still unclear how all these paper commitments will play out in reality over the medium term.
Regarding the current EUR/USD technical picture, buyers now need to work on reclaiming the 1.1580 level. Only then can they aim for a test of 1.1620. From there, a move toward 1.1635 becomes possible, though achieving it without support from large players will be quite difficult. The most distant target is the 1.1660 level. If the instrument falls, I expect any major buying activity only around 1.1560. If none appears there, it might be better to wait for a retest of the 1.1510 low or consider opening long positions from 1.1480.
Regarding the GBP/USD technical outlook, pound buyers need to break through the nearest resistance at 1.3365. Only then can they target 1.3385, though pushing above that level will be challenging. The furthest target lies in the 1.3415 level. In case of a decline, bears will attempt to reclaim control over 1.3330. If successful, breaking this range would deal a serious blow to bullish positions and drag GBP/USD down to the 1.3295 low, with the potential to reach 1.3255.
