.The Euro inched up on Monday following the announcement of a framework trade agreement between the United States and the European Union.

During a meeting in Scotland on Sunday, US President Donald Trump and European Commission President Ursula von der Leyen stated that the agreement included a 15% import tariff on EU goods, significantly lower than the 30% Trump had previously threatened to impose starting 1^st August.

The euro traded at $1.1753 at the time of writing, up 0.1% after an earlier gain of 0.3%. It also rose 0.2% to 173.64 Yen, marking its fifth consecutive session of gains and reaching a new one-year high, Reuters reports.

With fears easing over the economic impact of harsh tariffs, investors are now focusing on upcoming corporate earnings reports and central bank meetings in the US and Japan scheduled for the coming days.

“It could be a positive week, just purely from the fact that now we know the rules of the game, if you like,” according to Rodrigo Catril, senior currency strategist at National Australia Bank.

“Now that there is more clarity, you would think that not only in the United States, but around the globe, there will be a little bit more willingness to look at investment, to look at expansions, and to look at where the opportunities are.”

Despite recent developments, a comprehensive trade agreement between the world's two largest economies remains out of reach. However, senior negotiators from the United States and China are scheduled to meet in Stockholm on Monday.

Meanwhile, the Dollar held steady at 147.65 Yen, and the Dollar index, which measures the greenback against a basket of major currencies, was unchanged at 97.582.

Furthermore, both the Federal Reserve and the Bank of Japan are expected to keep interest rates unchanged at their policy meetings this week. However, traders will closely analyse follow-up statements to assess the likely timing of future policy shifts.

President Trump stated that the European Union intends to invest approximately $600 billion in the United States and significantly increase its purchases of American energy and military equipment.

The agreement mirrors a deal reached last week with Japanese negotiators, in which Japan committed to investing around $550 billion in the United States, along with accepting a 15% tariff on its automobiles and other imports.

Many in Europe will still view the 15% baseline tariff as too high, especially compared to the bloc's initial expectation of a zero-for-zero tariff agreement.

The investment aspect of the deal is expected to lead to capital flows out of Europe, which will likely strengthen the Dollar against the Euro, according to Shoki Omori, chief desk strategist at Mizuho Securities.

“Taken together, weaker relative growth prospects and a deteriorating balance of payments argue for a gradual depreciation of EUR/USD once the initial relief fades, notwithstanding the overnight uptick,” he stated.

The US Dollar strengthened on Friday, supported by strong economic data that indicated the Federal Reserve may delay further interest rate cuts.

Sterling was steady at $1.3443, whilst the Australian Dollar traded at $0.6568, and New Zealand's kiwi Dollar stood at $0.6014.