The single European currency continued to weaken today, trading below the $1.16 mark. Yesterday, the euro recorded a decline of about 1.3%, which is the biggest daily drop in the last two months, Reuters reports, News.bg reports.
On the Frankfurt currency exchange this morning, the euro exchange rate is moving around $1.1584-$1.1576, compared to $1.1654 at the close yesterday, a value set as a reference by the European Central Bank.
According to analysts, the main reason for the weakening of the euro is the new framework trade agreement between the European Union and the United States. The deal includes 15% tariffs on most European exports in exchange for investment commitments and large-scale EU purchases of American energy and defense products worth hundreds of billions of dollars.
Experts have described the deal as “disproportionately beneficial to the United States“, stressing that it lacks real stimulus for the eurozone economy.
French Prime Minister François Bayrou called the agreement “a dark day for Europe”, and German Chancellor Friedrich Merz warned that it threatens export-oriented sectors in Germany, especially in industry and mechanical engineering.
Markets reacted not with relief but with alarm, as the news raised concerns about a weakening economic outlook in Europe. This further undermined investor confidence in the euro.
Market participants are now turning their attention to upcoming decisions by the US Federal Reserve and the Bank of Japan, although no changes in interest rate policy are currently expected.