The euro continues to strengthen, reaching another peak against the US dollar. In recent trading, the single European currency rose by 0.5%, hitting $1.0548 – the highest level since December 10.
Reasons for the euro's rise
The main factor contributing to the euro's strengthening is the expected increase in defense spending in Europe. The European Union has announced a new plan to fund the military sector, which involves allocating €150 billion (approximately $158 billion) in credit to support the defense industry.
Experts associate the euro's growth with the fact that increased funding for the military sector could stimulate the region's economy, boost investment levels, and support GDP growth.
Long-term trend towards strengthening
Over the past month, the euro has shown a confident recovery, rising by almost 4% after reaching a two-year low. The currency's growth is due not only to internal economic factors but also to changes in the global investment climate – investors are paying attention to the strengthening European market and its prospects amid the current geopolitical situation.
Analysts' forecasts
Financial analysts expect that if defense spending continues to rise and economic support programs are adopted, the euro will continue to strengthen. However, its dynamics may also be influenced by external macroeconomic factors, including the monetary policy of the US Federal Reserve System and economic indicators in eurozone countries.