When the dollar began to slide in April following the announcement of so-called “reciprocal” tariffs by Donald Trump, many voices across Europe started to wonder: Could the euro’s moment in the global spotlight be in sight?
In the face of erratic decisions by the United States − which is amassing colossal debt − and a White House openly challenging the independence of the Federal Reserve, the single currency could offer a welcome haven of stability. Christine Lagarde, president of the European Central Bank (ECB), even devoted a speech to this prospect: “The shift under way also offers opportunities for Europe to take greater control of its own destiny and for the euro to gain global prominence.”
Four months later, the main effect of this strong euro has been the complaints of businesses. Even more than the tariffs, which have so far been uncertain and unpredictable, major European companies have suffered from the euro’s appreciation. Against the dollar, the euro gained 13% since the start of the year, now standing at $1.17; it has stabilized at around that level for a month. The euro appreciated by a similar amount against the yuan, China’s currency, because Beijing has acted to keep its currency stable against the dollar. The euro also rose by around 6% against the Japanese yen and the South Korean won.
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