EUR/USD retreated to lower levels on Thursday, down more than two-thirds of a percentage point from the day’s opening quote, after the U.S. dollar (USD) received a broad-based boost following initial announcements of an imminent trade deal between the United States and the United Kingdom. Europe appears to remain on edge with the Trump administration, with White House officials continuing to warn the entire continent "not to retaliate" against U.S. import taxes.

The US-UK trade deal will allow the UK to avoid high "reciprocal" tariffs that were due to return on July 9 after President Trump temporarily delayed his own "Liberation Day" tariffs.

However, a broad 10% tariff is still planned for all goods imported into the United States from the United Kingdom, which could quickly dampen sentiment. The Trump administration has fully suspended tariffs on key imports such as refined ethanol. Data shows that the United States has not imported refined ethanol from the UK in at least 15 years.