The EUR/USD currency pair is staging a remarkable comeback, rebounding from a near one-month low and setting its sights on the mid-1.1800s mark. But here's the kicker: this surge is largely fueled by a surprisingly weak US Dollar (USD), leaving many investors scratching their heads.
Despite facing a legal setback with the Supreme Court ruling against his tariff authority under the International Emergency Economic Powers Act (IEEPA), US President Donald Trump remains undeterred in his trade agenda. He swiftly countered with a new 15% tariff framework, sparking concerns about escalating trade tensions and their potential economic repercussions. Adding to the USD's woes, a disappointing US GDP report overshadowed even the strong inflation data, pulling the currency further away from its recent four-week high. This weakness has provided a much-needed tailwind for the EUR/USD pair, propelling it higher for two consecutive days.
And this is the part most people miss: While the US economy's dramatic slowdown in the fourth quarter of 2025, partly attributed to the record-long government shutdown, grabbed headlines, the core Personal Consumption Expenditure (PCE) Price Index told a different story. Its 0.4% monthly rise in January, pushing the annual rate to a three-year high of 3.0%, could potentially influence the Federal Reserve's decision-making process. This inflationary pressure might prompt the Fed to maintain interest rates at their current level during the March policy meeting, contrary to market expectations of rate cuts.
However, traders remain convinced that the US central bank will eventually lower borrowing costs, with a high probability of at least two 25-basis-point rate cuts in 2026. This sentiment continues to weigh on the USD, providing further support for the EUR/USD pair. Yet, the euro's journey isn't without its hurdles. Uncertainty surrounding European Central Bank (ECB) President Christine Lagarde’s leadership and the looming specter of a trade war with the US could create headwinds for the shared currency. In fact, the European Parliament’s trade chief has hinted at freezing the ratification of the US-EU trade deal until the Trump administration clarifies its trade policies.
Here's a thought-provoking question for our readers: With the USD's weakness seemingly benefiting the EUR/USD pair, is this a sustainable trend, or are we witnessing a temporary blip in the face of mounting global economic uncertainties?
To put today's currency movements into perspective, the table below illustrates the percentage change of the US Dollar against major currencies. Interestingly, the USD exhibited its strongest performance against the Australian Dollar.
| Base Currency \ Quote Currency | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
|-------------------------------|-----|-----|-----|-----|-----|-----|-----|-----|
| USD | - | -0.38% | -0.26% | -0.62% | -0.18% | -0.07% | -0.27% | -0.49% |
| EUR | 0.38% | - | 0.12% | -0.27% | 0.21% | 0.32% | 0.11% | -0.11% |
| GBP | 0.26% | -0.12% | - | -0.40% | 0.08% | 0.19% | -0.01% | -0.23% |
| JPY | 0.62% | 0.27% | 0.40% | - | 0.49% | 0.59% | 0.39% | 0.18% |
| CAD | 0.18% | -0.21% | -0.08% | -0.49% | - | 0.11% | -0.09% | -0.32% |
| AUD | 0.07% | -0.32% | -0.19% | -0.59% | -0.11% | - | -0.20% | -0.43% |
| NZD | 0.27% | -0.11% | 0.00% | -0.39% | 0.09% | 0.20% | - | -0.22% |
| CHF | 0.49% | 0.11% | 0.23% | -0.18% | 0.32% | 0.43% | 0.22% | - |
The accompanying heat map visually represents the percentage changes between major currencies. By selecting a base currency from the left column and a quote currency from the top row, you can pinpoint the exact percentage change between the two. For instance, the box at the intersection of the USD (base) column and the JPY (quote) row displays the percentage change for the USD/JPY pair.
