The euro experienced a rebound, nearing its highest level since early November, supported by positive economic news from Germany. However, escalating trade tensions between the US and EU and ongoing uncertainties related to the war in Ukraine present challenges to its continued appreciation. Investors are also awaiting Fitch’s decision on France’s credit rating.
- The euro rebounded toward $1.09, approaching its strongest level since early November.
- Germany reached an agreement on a debt overhaul and an increase in state spending.
- Friedrich Merz agreed with the Green and Social Democrat parties on reforming borrowing rules.
- Investors are awaiting Fitch’s decision on France’s credit rating.
- President Trump threatened a 200% tariff on EU alcoholic beverages in response to retaliatory taxes on U.S. whiskey.
- Trump announced a “very good and productive” phone call with Putin regarding the Ukraine war.
The currency’s upward movement is influenced by positive developments in the Eurozone’s largest economy, suggesting strengthening economic fundamentals. However, potential headwinds exist, stemming from international trade disputes and geopolitical instability. The future valuation of the currency hinges on these competing forces. Credit rating decisions related to Eurozone countries may provide some extra information to make decisions.