The dollar fell on Thursday after Donald Trump announced his intention to send letters to certain US trading partners within two weeks informing them of the tariffs that will be imposed on them.
As a result, the euro gained ground against the dollar, returning to its highest level since the end of 2021.
While in the wake of Donald Trump's election last November, everyone expected the euro to return to parity, the opposite has happened. Since the beginning of the year, the euro has risen by 12%.
This movement is mainly due to the decline of the dollar, in a context of uncertainty linked to the trade war, which is prompting investors to reduce their exposure to US assets. The dollar index has thus fallen 10% over the year.
Gold rather than the euro
The rise in parity is generally good news for Europe, particularly because it helps to control inflation (lower import costs).
Some even see the decline in appetite for US assets as an opportunity for the single currency. This is particularly the case for Christine Lagarde. Last month, the ECB president said that "the changes underway are paving the way for a global euro moment."
For now, the dollar remains dominant. The greenback accounts for 58% of international reserves. While this is a historically low level, it is still well above the euro's 20%.
The euro therefore still has some way to go before it can establish itself as a global reserve asset. Especially since it is not only competing with the dollar: gold is also emerging as a serious contender. In three years, its price has jumped by 80%, driven by massive purchases by central banks. According to the ECB, the weight of gold in central bank reserves exceeded that of the euro in 2024.
Sources: ECB, Financial Times
