Europe Weekly: Could the euro’s strength prompt a July cut?

With the euro going from strength to strength and energy prices having dropped back the case could arguably be made for the ECB to cut rates in July and some policymakers have sounded concerned about the euro’s appreciation this week. However, we still think they are much more likely to wait until September to ease policy further. Next week, the expiry of the pause to "Liberation Day" tariffs should reveal the current state of US-EU trade negotiations. We think the most likely outcomes are an extension of talks or a quite vague preliminary deal.