FX.co ★ Euro Set for 1.5% Monthly Gain

The euro concluded January trading at $1.19, nearing a four-year peak and representing a 1.5% increase over the month. This rise was driven by a general weakness in the US dollar as investors absorbed various economic and policy developments. The dollar faced pressure due to ongoing policy uncertainties in Washington, including renewed tariff threats by President Trump, concerns over the Federal Reserve's independence, fears of a potential government shutdown, and the president's comments indicating indifference towards the dollar's recent depreciation. The Eurozone's economic performance further supported the euro, with the economy growing by 0.3% in the fourth quarter of 2025, consistent with the previous quarter and slightly surpassing the market's 0.2% expectation. Spain, Germany, and Italy all outperformed forecasts. Additionally, the European Central Bank's Consumer Expectations Survey indicated an acceleration in expectations for three and five years ahead. Meanwhile, ECB official Martin Kocher had previously cautioned that a continued increase in the euro's value might lead the central bank to consider resuming interest-rate cuts.