Euro at the Top: How Fiscal Games and Political Drama Are Crushing the Dollar and Lifting the Euro
The euro has made a huge leap this year! It has strengthened by a whopping 13% since the start of the year, reaching its highest level in the last four years, breaking the psychological barrier of 1.17 dollars, with the next target being 1.20 dollars! Is this the end of the dollar’s dominance?
Euro rises, dollar falls – what’s going on?
While Europe is implementing fiscal reforms previously thought impossible, the US is struggling with economic slowdown and political pressure on the Federal Reserve. Germany passed a constitutional amendment in March that excludes military infrastructure spending from strict debt rules, enabling the creation of a multi-billion euro fund for green energy and digital transformation. Additionally, Germany plans to increase military spending to 3.5% of GDP, in line with NATO goals.
Across the Atlantic, the US economy shows signs of slowing down, with GDP falling in the first quarter. President Donald Trump is putting pressure on the Federal Reserve, and rumors about a possible replacement of Fed Chair Jerome Powell are shaking investor confidence. Powell has clearly stated that it is not yet time to cut interest rates, but markets estimate a 25% chance of rate cuts by the end of July.
Speculation and technical analysis – Euro on track to 1.20?
Analysts say the euro’s rise is less about improving European economic outlook and more about losing faith in the dollar. Investors are pulling out of the dollar and seeking safety in the euro. Technical analysis shows the EUR/USD pair structure remains positive, and breaking the 1.17 level could lead to further gains towards 1.20 and beyond, depending on economic and political developments in the second half of the year.
What does this mean for us?
For tourists in the region, a stronger euro means less hassle exchanging money. But for the global economy, this signals a changing world. Will the dollar lose its dominance? Will Europe seize this opportunity to strengthen economically? And what will Trump do with the Fed? These are the questions shaping the future of currencies.
Bonus: Dollar down, Euro up
The dollar has fallen to its lowest level against the euro since 2021, and President Trump continues to criticize the Federal Reserve for not cutting interest rates. Trump is even considering replacing the Fed chair, further undermining confidence in the US currency. Investors are nervous, and markets are turning to the euro as a safer bet.
Conclusion
The euro has shown this year that it can be a serious player on the global currency stage. Fiscal reforms in Europe, political instability in the US, and market speculation have led to the euro’s rise and the dollar’s fall. Is this the start of a new era or just a short-term trend? Stay tuned to see how this drama unfolds!
So, what do you think? Is the euro the new king of currencies, or will the dollar pull through? Drop a comment, spark a debate, or just share a laugh with friends over this wild money story spinning around the world!
Sources: Blic Biznis, Euronews Business, Kurir Biznis
