The euro has surged over 10% against the US dollar since January, reaching 1.1369 dollars per euro on Monday (April 14).

While much of the euro's rally stems from a flight from the dollar due to US President Donald Trump's protectionist trade policies — including steep tariffs of 145% on China — part of the single currency's strength reflects growing confidence in the eurozone economy.

The 20-member eurozone is rebounding from a mild recession in 2023, with growth of 0.8% last year and a projected 1.3% expansion in 2025. However, looming 20% US tariffs on imports from the European Union — currently paused for 90 days — could still derail this outlook.

Anticipating a European recovery amid US economic uncertainty, many foreign investors are shifting capital from the dollar into European stocks and bonds, further bolstering the euro's value.

The euro’s strength is also being fueled by diverging monetary policies. While the US Federal Reserve has begun cutting interest rates, theEuropean Central Bank (ECB) remains hawkish in response to stubborn inflation in parts of the eurozone. Lower US interest rates make holding dollars less profitable, prompting investors to favor the euro instead.

Even so, major currency swings of 10% in mere months are relatively rare and the........

© Deutsche Welle