Euro Continues to Rise, Boosted by Hopes of German Fiscal Reform Plans

The euro has continued its upward trend since the opening of Monday’s morning trading, driven by talk of fiscal reform in Germany, the Eurozone’s largest economy, amid uncertainty about the direction the single European currency might take in the coming period.

This rise came in complete disregard of the European Central Bank’s decision to cut interest rates, which saw that the region’s growth was suffering from weakness and that inflation remained stable in an area close to the central bank’s target in the recent period.

The EUR/USD rose to 1.0834 compared to the previous daily close of 1.0831. The pair fell to its lowest level on the first trading day of the new week at 1.0804, compared to its highest level of 1.0874.

The financial plans unveiled by expected German Chancellor Friedrich Merz and the potential ruling coalition – which include 500 billion euros earmarked for defense and infrastructure spending, which would support economic performance – have given a boost to the single European currency in the past few days.

Concerns raised by U.S. President Donald Trump’s statements about the future of the U.S. economy have also contributed to adding more upward momentum to the euro.