Global markets and the euro saw a notable lift on Monday after U.S. President Donald Trump delayed a proposed 50% tariff on European Union goods until July 9, providing temporary relief amid ongoing trade uncertainty.

The MSCI World Index rose 0.2%, and Europe’s STOXX 600 index climbed 1%, recovering losses from Friday’s market jitters. The euro gained 0.24% against the dollar, reaching its highest level since late April, while the pound also edged higher. In contrast, the dollar index slipped 0.1%.

Trump’s policy shift, following a request from EU Commission President Ursula von der Leyen for more negotiation time, highlighted the unpredictability of U.S. trade policy. Analysts noted that this volatility is driving investors to shift capital from U.S. assets to Europe and Asia, reflecting concerns over a potential U.S. recession and rising risk premiums.

SEB Research described the situation as a “toxic cocktail” for the U.S., citing weakening investor confidence, capital outflows, and policy uncertainty. Meanwhile, currency strategists framed the current environment as a "sell dollar" story, underpinned by eroding faith in U.S. economic leadership.

Trading volumes were muted due to U.S. and U.K. holidays. Still, broader economic concerns linger, including surging sovereign debt levels and Moody’s recent downgrade of the U.S. credit rating.

In Asia, Chinese and Hong Kong stocks dipped due to fears of a price war in the auto sector and tariff risks for Apple suppliers. Japan’s Nikkei rose 1% after Trump backed Nippon Steel’s acquisition of U.S. Steel, while Japanese bonds rallied ahead of inflation data expected later this week.

Oil prices edged up slightly, while gold slipped from recent highs as investors reassessed market risk.