EURUSD Hits 4-Month Low as Trump Victory Boosts Dollar

The euro dropped by over 1.8%, falling to $1.072—the lowest in about four months. This decline could lead to the euro experiencing its worst day since March 2020. The drop happened because a Trump victory in the US presidential election made the US dollar stronger.

If Trump wins, the European economy could face serious challenges. New tariffs on important industries like cars and chemicals might be imposed. Additionally, there are worries about security issues and Ukraine’s support level.

Recently, “Trump trades” have been raising the dollar. Trump’s policies are seen as likely to increase inflation, which makes the market expect higher inflation rates and more government spending.

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At the same time, European traders have changed their views on the European Central Bank (ECB) lowering interest rates. They now believe the deposit rate will decrease to 2% by 2025, a slight drop from the 2.1% that was expected before the election.

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Ethan O. Miller

Ethan O. Miller is a seasoned Forex analyst. His insightful articles offer a unique perspective on currency trends, aiding both novice and experienced traders in navigating the Forex market.

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