By Gill Bikram Singh 
Euro Surges as Dollar Weakens
European markets rallied while the euro reached its highest level since the US election, as the dollar fell amid growing fears of a potential US recession, dubbed the “Trumpcession.” The euro surged past $1.09 for the first time since early November, reversing the post-election dollar boom triggered by Donald Trump’s victory.
The drop in the dollar comes after new US tariffs on Canada, Mexico, and China, as well as potential levies against Europe, raised concerns about slowing economic growth in the US. The greenback lost 0.5% against a basket of major currencies, wiping out all gains since Trump’s election.
Global Markets Show Mixed Response
After a sharp global stock sell-off on Monday, Asian markets showed some stability, while European indices gained:
- Germany’s DAX rose 0.7%
- France’s CAC 40 gained 0.5%
- Italy’s Borsa added 0.3%
- London’s FTSE 100 dipped slightly by 0.2%
Japan’s Nikkei and South Korea’s KOSPI posted losses, while Chinese exchanges saw modest gains. Wall Street futures and Treasury bond yields also recovered slightly.
US Economic Concerns Weigh on Investors
Analysts warn that the escalating tariff battle and spending cuts could slow US economic growth. Swiss bank UBS has raised its probability of a US recession to 30%, up from 25% last month.
Stephen Innes, managing partner at SPI Asset Management, noted that while markets have not yet “hit the panic button,” sentiment remains fragile as investors worry about the long-term effects of Trump’s policies.
Tesla Shares Slump as Trump Backs Musk
In a separate market development, Tesla shares have plummeted by over 50% since December, with a 15% drop on Monday alone—its worst daily decline since 2020. Trump publicly defended Tesla CEO Elon Musk, accusing “Radical Left Lunatics” of attempting to sabotage the company. He even pledged to buy a Tesla in support of Musk.
Euro’s Strength Expected to Continue
The euro’s rise has been driven by multiple factors, including shifting EU fiscal policies, an interest rate move by the European Central Bank, and weaker-than-expected US economic data. Analysts predict the euro could hit $1.15 by year’s end and possibly $1.20 by 2026.
With concerns over the US economy mounting, investors continue to favor the euro and the Japanese yen as safe-haven currencies.