Euro Plummets Amid U.S. Policy Uncertainties

The euro has hit a 6-1/2-month low against the U.S. dollar as market uncertainties over potential tariffs by the U.S. government loom large. The dollar index rose due to expectations of policy changes under President-elect Trump, affecting global currency dynamics and investor sentiment.

The euro fell to its weakest point in over six months against the U.S. dollar on Monday, overshadowed by investor concerns about possible new U.S. tariffs that might impact the European economy. Concurrently, the dollar index exceeded recent high levels following the U.S. presidential election, with markets in a wait-and-see mode regarding America's future policy directions.

Bipan Rai, from BMO Global Asset Management, noted, 'The market seems to be anticipating a stronger Republican influence, driving the dollar upwards.' The euro's vulnerability was exposed as news surfaced about President-elect Donald Trump possibly appointing the trade-focused Robert Lighthizer, signaling tougher U.S. trade stances.

Meanwhile, political factors remained fervent as German Chancellor Olaf Scholz set the stage for early elections. Additionally, analysts highlighted that Trump's administration, with expected tariff implementations, might sidestep congressional intervention. In financial markets, Bitcoin surged past $83,000, buoyed by the election of pro-crypto politicians in the U.S.

(With inputs from agencies.)