The euro continues to gain ground against the US dollar and is again approaching the 1.14 level, which it briefly touched at the end of last week—a level it hadn’t reached since early 2022. The single currency has appreciated by almost 10% against the greenback since early March, as investors grow increasingly unsettled by the US administration’s erratic trade policies and its apparent abandonment of long-standing geopolitical alliances. This shift has sparked growing concern among bond market observers, with the benchmark 10-year Treasury bill seeing a decline in price. Despite the current turbulence and a general flight to safety, investors appear to be turning away from what has traditionally been considered the ultimate safe-haven asset. Judging by recent market performance, the net result of the Trump administration’s policies has, so far, been volatility and losses in equities, rising bond yields, record highs for gold, and sharp gains for the euro and other main currencies, as the US dollar weakens across the board. This trend may signal the end of the American exceptionalism that characterised markets in recent years, which saw US assets consistently outperform their global peers. Against this backdrop, it is difficult to still view the US dollar as a refuge asset — as we might have done just a few months ago. In fact, the euro’s performance is beginning to resemble that of a safe-haven currency, clearly demonstrating that, in financial markets, consistent policy, stability, and predictability are highly prized by investors.
Source: ActivTrader
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