FX.co ★ Euro Eases Below $1.15

The euro recently traded at approximately $1.14, just shy of the $1.15 high reached earlier this month, marking its strongest position since 2021. This shift comes as apprehensions regarding the Federal Reserve’s autonomy have marginally subsided. The U.S. dollar regained some ground following President Trump's assurance that he has no plans to dismiss Fed Chair Jerome Powell. Nevertheless, the euro has appreciated by over 5% against the dollar throughout April, as investors increasingly scrutinize the dollar’s prevalent role in the global financial system, turning to the euro as a potential alternative. Further support for the euro arises from anticipations of heightened defense expenditure, especially in Germany. On the monetary policy front, the European Central Bank (ECB) cut its deposit rate by 25 basis points to 2.25%, a move widely expected, reaching its lowest point since early 2023. Additionally, the ECB removed references to its policy stance being "restrictive," cautioning that the economic outlook has deteriorated amid rising trade tensions. Markets are currently predicting the possibility of two or three more 25 basis point rate cuts by the year’s end.