FX.co ★ Euro Tops $1.1

The euro has gained value, reaching $1.10, approaching peaks not seen in six months. This upward movement is primarily driven by a general weakening of the dollar, as markets continue to absorb the fallout from the intensifying US-China trade war. The most recent implementation of mutual tariffs by the US, which includes a significant 104% duty on Chinese imports, has intensified worries about slowing global economic growth and the possibility of a recession in the United States. This changing sentiment has led investors to move away from traditional safe assets such as US Treasuries and the dollar. Meanwhile, in Europe, the euro has received a boost from increased political stability after Germany's CDU/CSU bloc reached a coalition agreement with the SPD, with Friedrich Merz expected to take on the role of chancellor next month. On the monetary policy front, it is widely anticipated that the European Central Bank will reduce interest rates by 25 basis points this month. Additionally, markets are factoring in two further rate cuts before the year's end, with rising speculation about a possible third cut should the economic outlook worsen.