UK Food Inflation Forecast to Hit 6.4% by Mid-2027 
Fitch Eyes Japan Budget for Fiscal Discipline 
Hormuz Shipping Slows as Iran Threats Lift Oil Risks 
China Exports Surge 25% in August as Trade Surplus Hits $119 Billion 
Canada Retaliatory Tariffs on U.S. Goods Take Effect 
Asian Stocks Fall as Oil Tops $100, Yields Rise 
German Inflation Accelerates to 2.9% in August 
China Boosts Gold Reserves by 650,000 Ounces as Prices Rally 
ECB Rate Hike in Focus as Oil Tops $100 
China Buys 1 Million Tons of U.S. Soybeans Ahead of Xi Visit 
Japanese Yen Nears Seven-Month High as Oil Approaches $100 
China Inflation Accelerates in August as CPI, PPI Rise 
Japan GDP Growth Beats Forecast, Boosting BOJ Rate Hike Bets 
Iraq Seeks 6 Million Bpd OPEC+ Oil Quota 
Oil Prices Hold Near Highs as U.S.-Iran Conflict Escalates 
Norway Core Inflation Rises to 3% in August 
Brent Oil Tops $100 as Middle East Conflict Threatens Supply 
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Euro Declines as Dollar Strengthens After Trump’s Election Victory
EUR/USD Dips Amid U.S. Economic Confidence
Following Donald Trump’s decisive election win, the euro experienced a sharp 1.7% drop against the dollar, reaching $1.0741. With Republicans possibly controlling both the Senate and House of Representatives, this "red sweep" will likely boost U.S. economic policies that favor the dollar's strength.
Analysts Predict Euro-Dollar Parity Possibility
According to JPMorgan analysts, a full Republican legislative path under Trump could further weaken the euro. If economic resilience in the U.S. endures, given Trump's anticipated policies, including fiscal stimulus and tariffs, the EUR/USD exchange rate may approach parity (1.00).
Global Impact and ECB's Possible Response
The European Central Bank (ECB) might lower interest rates to counteract potential economic shocks from Trump’s policies, adding further pressure on the euro. Meanwhile, the Eurozone’s dependency on monetary rather than fiscal policy contrasts with the more dynamic U.S. economic approach, likely amplifying the euro's decline.
Historical Context and Future Moves
JPMorgan highlights a historical precedent: during 2018-2019, the dollar strengthened amid trade uncertainties. Analysts now recommend short positions on EUR/CHF due to lower sensitivity to U.S. rates and limited Swiss National Bank intervention.
Key Caveat: Potential U.S. Rate Adjustments
The main risk to this outlook is a potential drop in U.S. interest rates, which could moderate some of the anticipated euro depreciation.
