Euro near highs against the dollar is a double-edged sword for the EU
The single currency approached $1.20 this week, giving Europeans more purchasing power but making exports—including Portuguese tourism—more expensive.
The euro continued its appreciation against the dollar this week, surpassing its 12% rise since the beginning of the year, in line with Trump's vision of a less valuable US currency.
The markets are not thrilled with this development, given the negative impact it will have on corporate profits in Europe and the possibility of a new wave of deflation, as exports will also become more expensive in the American market, hindering recovery via external channels.
In addition to the uncertainty surrounding the US economy, where Trump's trade zigzagging continues to undermine stability and predictability, the single currency has benefited from Germany's recent openness to increasing spending and stimulating the economy through this channel. As a result, the currency appreciated 12.7% since the beginning of 2025 against the dollar this week, having since retreated from these values close to four-year highs.
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