Currency Markets Wobble Amid Trade Tensions and Fiscal Reforms

The euro and pound have maintained their multi-month highs against the dollar amid economic slowdown concerns and Germany's fiscal reforms. Global trade disputes escalate tension, affecting currency volatility. Germany's fiscal reset aims to boost growth, while U.S. inflation data reveals weaker dollar influence.

The euro and the pound held near multi-month peaks against the dollar on Thursday. The U.S. currency remains under pressure due to slowing economic growth concerns and the anticipation of a German debate on significant fiscal reforms.

Global trade tensions and potential U.S. recession risks have stirred market volatility. President Donald Trump's policy shifts, including new tariffs threats, have impacted the U.S. dollar more than its European counterparts, pushing the euro to near a five-month high, though slightly down at $1.0880.

Germany's fiscal reforms proposal, including a 500 billion euro fund, is under parliamentary debate. Analysts, like Commerzbank's Michael Pfister, hope these reforms will spur growth in Germany and the eurozone. Meanwhile, the Bank of Japan's steady stance leaves the yen unchanged, as economists predict a policy rate rise later in the year.

(With inputs from agencies.)