Euro Surges Past $1.20 Against Dollar: What's Driving the Rise?

• The euro has reached its highest level against the US dollar since 2021, crossing the $1.20 mark.
• The dollar's weakness is attributed to US President Donald Trump's trade confrontations, attacks on the Federal Reserve, and speculation of US-Japanese intervention to stem yen weakness.
• European fiscal stimulus, particularly from Germany, and efforts to diversify away from the dollar have also contributed to the euro's strength.
• A stronger euro makes European exports more expensive, potentially impacting company earnings, especially for STOXX 600 firms with significant US revenue.
• While the ECB monitors the euro's appreciation and its impact on inflation, the euro is unlikely to replace the dollar as the top reserve currency soon due to the dollar's global dominance.

Why It Matters: The euro's rise past $1.20 is driven by dollar weakness and European economic factors, impacting exports and ECB concerns.