
The euro has made huge gains on the dollar due to President Trump’s tariff policy uncertainty.
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According to central bankers and strategists, the global importance of the euro will continue to strengthen this year, while political power has brought further growth to the dollar.
Officials from the European Central Bank spoke at an economic forum at Aix-en-Provence in France. While the euro may be the highest reserve asset in the world, the euro may increasingly threaten green, but as long as it has the support policy behind it, the currency will be seen as a stable alternative.
“If you put the (US) tariffs with Attack on the Fed and institutions in the fiscal sustainability of the U.S. after the “beautiful” tax law, it explains the evolution of the dollar exchange rate in recent weeks,” Greece’s central bank governor Yannis Stournaras said in a CNBC amendment panel on Saturday.
“Those who impose tariffs will be hurt first,” Stonalas added.
Euro/USD.
As of Monday, the status of potential U.S. European Union trade deal Stay in troubleexpected updates in the next few days. Instructions for the Early Trade Agreement in Washington – including U.K. and Vietnam – i.e., even if all the goods that the White House enters the United States from overseas are significantly higher than their responsibilities at the beginning of this year, even if they are lower than the interest rates in April.
So far, in 2025, U.S. tariff negotiations and their impact on the economy and inflation and Fiscal growth in the EUthe euro-dollar exchange rate increased by about 14%. Despite ECB lowers interest rates and The Fed stabilizes them.
Meanwhile, U.S. President Donald Trump manages to pass Tax and expenditure billsachieve a significant political victory – despite this, Increase federal deficitit may inspire further troubles for US creditors The market is already in chaos Tariffs this year.
“The dollar’s situation will not change from one day to another, but the euro can gain benefits in international reserves,” Stournaras continued. He said that this would require the EU to complete its long-term efforts to form banking alliances and capital market unions and reduce internal barriers to allow the euro to enhance its role in international markets.
Gabriel Makhlouf, head of the Irish Central Bank, responded to the sentiment.
“I think what we’re seeing now is a readjustment, a readjustment for investors,” Makhlouf said.
“It’s not a lot of tariffs, which has caused a lot of headlines. (Investors) see that the rule of law in the United States is actually weakening and responding accordingly because it means that their investments and assets are more risky and are adjusting.”
The global proportion of the euro in foreign exchange reserves remained stable about more than a decade ago, about one fifth. US dollar share declined from 68.8% for the full year 2014 to 57.8% to the end According to a ECB report released in June, in 2024, the exact impact of the shift is not yet known.
USD index.
Although the euro has not suddenly replaced the dollar, Marklouf said it is improving its global position and that both the ECB and political leaders need to take this opportunity to capitalize on the momentum.
Paschal Donohoe, president of European competition at the Eurozone Finance Ministers Alliance, told CNBC’s Charlotte Reed NextGenerationU The stimulus program was developed in response to the Covid-19 pandemic.
“For us, the key is how we build a strong foundation for the euro,” Donohoe said on Saturday. Stability is one of the most important factors.
The way forward
Strategists say Euro dollar interest rates will fluctuate in the coming months under the latest circumstances of tariffs, monetary policy, etc., but should remain broad support for euro zone currencies.
The nearest peak Geopolitical risks and Oil price Francesco Pesole, FX strategist at ING, said in a June 26 report that only a small temporary boost focused on highlighting its newly discovered vulnerability.

“Indeed, efficient forward-looking forex markets have never really traded too much risk of long conflicts and sustainable energy prices. But this is at least partly due to widespread dislike of holding the dollar due to medium-term considerations.”
These factors include financial issues, Political threat to Fed independenceHe pointed out that, perhaps the expected interest rate will be lowered in advance.
Deutsche Bank strategists George Saravelos and Christian Wietoska pointed out on July 1 that the main background of the decline in the dollar is that “foreigners no longer buy enough dollar assets to fund the huge current account deficit in the United States.”
They said: “Foreigners don’t need to sell assets to us to weaken the dollar, but just say ‘no, thank you’ for buying more. This is still information on the various high-frequency dollar traffic metrics we have.”
– Chloe Taylor of CNBC contributed to this story.