Euro Outlook

Muted Euro Momentum, Dovish BoC, and Fragile CEE FX Define the Week

Euro Surge Fueled by Peace Prospects, Fiscal Stimulus, and Shifting US-EU Dynamics

In the space of a few weeks, the situation in Europe has changed radically, notably as a result of JD Vance's Munich speech and the rapprochement between the United States and Russia over peace in Ukraine, as well as questionings about European security raised by Trump’s announcements. For European countries, these events have been an ‘electroshock’, and they quickly announced a plan to increase defence spending by up to €800bn.