The euro rises against a dollar under strain

On Tuesday 27 January, the euro crossed the 1.20 dollar mark, a level not seen since 2021.

Since Donald Trump''s inauguration, the European currency has appreciated by nearly 15% against the dollar. This rise is explained by the climate of uncertainty weighing on investors, who are concerned by the policies of the US president: trade and military threats, as well as pressure exerted on the US Federal Reserve.

In response to the decline of the American currency, the head of state stated that "the dollar is doing very well", a declaration that contributed to a 2% retreat of the greenback over one week against the euro and the pound sterling.

That said, the governor of the Banque de France, François Villeroy de Galhau, recalled that the euro will not replace the dollar as the international reference currency. Although the European currency will not supplant the dollar, it nevertheless benefits from this situation.

With many products imported in dollars, the appreciation of the euro improves the purchasing power of European importing companies, which benefit from a more favourable exchange rate. This dynamic strengthens the attractiveness of the European currency.

However, the situation remains unstable and its evolution will have to be monitored closely.