Euro rises – Trump’s policies can push it up

The importance of the global euro will continue to strengthen this year while political forces nourish more gains against the US dollar, according to central bankers and strategists.

Speaking at an economic forum at AIX-EN-PROVINCE, France, last week, European Central Bank officials said that although the euro may be far from the Greenback threat as a better global reserve asset, the currency will be increasingly considered a stable alternative as long as it has a political impact supporting behind it.

If you merge the customs tariff (we) with The attacks on the federal reserve “The institutions, with the financial sustainability of the United States after the” beautiful “tax bill, explains the development of the dollar exchange rate in recent weeks,” Yanis Stornarras, the ruler of the Central Bank in Greece, said during the CNBC.

“Those who impose definitions will be hit first,” Stornarras added about the economic impact of the high rates.

As of Monday, a commercial deal for the possible European Union in the United States It is still forgettingWith an expected update in the coming days. The indication of Washington’s early trade deals – including with UK and Vietnam – Is this that the White House duties will be widely higher on all goods coming to the United States from abroad than they were at the beginning of the year, even if they are less than the threatened rates in April.

So far in 2025, the wide uncertainty about customs tariff negotiations and its impact on economics and inflation, along with expectations Financial support in the European UnionI paid an increase of approximately 14 % in the euro against the dollar. These gains came though European Central Bank Stock Exchange Reducing interest rates and Federal reserve keeps them fixed.

Meanwhile, US President Donald Trump managed last week to pass Comprehensive tax and bidding of an invoiceScored a great political victory – which is expected with that Increased federal deficitIt is possible to feed more tension among the creditors they have Already enjoy chaos in the market About definitions this year.

“The state of the dollar will not change from day to day, (but) the euro in a position that allows it to gain in international reserves,” Stornarras continued. He said that this will require the European Union to complete its long efforts to form a union union and the tragedy of capital and reduce the internal barriers to allow the euro to increase its role in international markets.

The head of the Central Bank in Ireland, Gabriel Makhlouf, chanted the feelings.

“I think what we see now in dollars is to reorganize and re -adjust the investors,” Makhlouf said.

“It is not a lot of customs tariffs, which get a lot of major headlines. (Investors) believe that the rule of law in the United States is already weakening and responding accordingly, because this means that there is a greater danger to their investments and assets, and they are controlling.”

The global percentage of the euro in foreign currency reserves was almost constant for more than a decade, by about the fifth. The US dollar share declined from 68.8 % per year 2014 to 57.8 % at the end 2024, according to the European Central Bank’s report published in June, with the precise impact of transformations in 2025 is not yet clear.

Although the euro is not about to replace the dollar suddenly, Makhlouf said it enhances its global position and that both the European Central Bank and political leaders need to seize the opportunity to benefit from this momentum.

“There will be a significant increase in borrowing the euro submitted in the coming years, especially because of NextGENERIONHEUU The stimulus project developed a COVID-19 epidemic.

“The main thing for us is how we can have strong foundations for the euro,” Donuho said on Saturday, referring to stability as one of the most important factors.

The fact that the last height is in Geopolitical risk and Oil prices Francesco Bezol, a strategic expert at G, said in a note on June 26, that only paying a small and temporary batch to the dollar highlights its newly discovered fragility.

He said: “It is true that the very advanced foreign currency market has never traded the great dangers of prolonged conflict and sustainable energy prices. But that was at least partly due to the wide aversion to keeping dollars due to medium -term considerations.”

These factors include financial concerns, Political threats to the independence of the Federal ReserveHe pointed out that reducing interest rates in the Federal Reserve early is expected.

George Saravilus, Chrisian and Yituka confirmed in a note on July 1 that the main background of the dollar’s ​​decline is that “foreigners no longer buy enough dollar assets to finance the huge deficit in the current account in America.”

They said: “Foreigners do not need to sell American assets to weaken the dollar, but just a saying” No thank you “to buy more. This is still a message of standards for the high dollar flow of our frequency.”

Chloe Taylor of CNBC contributed to this story.