EUR/USD rebounds above 1.1200, downside remains due to improved US Dollar

• EUR/USD may lose its ground as the US Dollar receives support from easing trade tensions.
• President Trump announced a "major" trade deal with the United Kingdom, although key tariffs remain at 10%.
• US Initial Jobless Claims dropped to 228,000 for the week ending May 3, slightly beating expectations.

The EUR/USD pair trimmed daily losses and is trading around 1.1230 during Friday's Asian session. The pair depreciated as the US Dollar (USD) found support from upbeat US economic data and signs of easing trade tensions.

US President Donald Trump announced a "major" trade deal with the United Kingdom (UK), although key tariffs remain at 10%, which has tempered market optimism. Attention now turns to preliminary US-China trade talks set for this weekend in Switzerland, but both sides have downplayed expectations of a breakthrough.

Trump continues to take a hardline stance on China, particularly after appointing a new envoy to Beijing. Although discussions around potential tariff exemptions are underway, the US administration remains cautious, with Trump stating they are "not looking for so many exemptions."

On the data front, US initial jobless claims fell to 228,000 for the week ending May 3, slightly below expectations and down from the previous week's unrevised figure of 241,000. The seasonally adjusted insured unemployment rate held steady at 1.2%. However, the four-week moving average edged higher to 226,000, and continuing jobless claims dropped by 29,000 to 1.879 million for the week ending April 26.

Meanwhile, the Euro (EUR) remains under pressure as markets increasingly price in further rate cuts by the European Central Bank (ECB), possibly as soon as the June meeting. ECB officials have voiced concern over the Eurozone's economic outlook, although they maintain confidence that inflation will sustainably return to the 2% target by year-end.