The rolling stone gathers no moss. It can be said for a long time that the position of the US dollar in the international economic system is indestructible. His share in calculations, gold and foreign exchange reserves and conversion operations is so great that it is impossible to deprive the king of the throne. However, nothing will change until you start doing something. And Europe’s first steps to enhance the role of the euro can lend a shoulder to EURUSD.
The ECB is ready to provide liquidity in euros to any central banks in the world that have not tarnished their reputation with money laundering or other illegal activities. The Bundesbank praises the stablecoins pegged to the regional currency, and Sweden’s desire to join the eurozone adds optimism to the EURUSD bulls. For a strong economy, a weak currency is a rarity, and the Scandinavian country is firmly on its feet. The proof is the strengthening of the crown.
The ECB’s provision of free liquidity could increase demand for the euro and lead to its strengthening. This is the opinion reached not only by ING, but also by the Bank of France. He expresses concern about this, referring to the negative effects of the revaluation on European exports. In fact, this process can really boost the EURUSD quotes due to the capital rotation taking place in the global financial markets. Concerned about the policy of the White House, investors are moving their money from the United States to Europe and other regions. Expanding access to liquidity in euros would make their lives easier.
Another factor supporting the EURUSD could be a change in the leadership of the ECB. Christine Lagarde is leaving her post in 2027, and according to Bloomberg experts, Dutch Claes Knoth seems to be the most likely candidate to replace her. One of the biggest “hawks” of the Governing Council.
Suffice it to recall how the US dollar strengthened in response to Donald Trump’s choice of Kevin Warsh as chairman of the Fed. The markets have received the least dovish candidate of all possible candidates. The same thing could happen in Europe. Expectations of the dominance of the “hawks” in the ECB risk strengthening the euro. In this case, the chances of an increase in the deposit rate by the end of the year will increase.
Thus, along with the divergence in monetary policy and the narrowing of the divergence in economic growth between the United States and the eurozone, the EURUSD bulls have other arguments for restoring the uptrend. Let the dollar still struggle in the near future due to the long pause of the Fed. However, you can’t escape fate. The future of the euro looks better.
