Euro Value Surges as Markets React to Tariff Shock

The euro is appreciating rapidly, approaching its highest level since November 2024, after US President Donald Trump introduced sweeping tariffs that shook currency and bond markets. 

By early Thursday morning, the euro had risen 0.5% to $1.0915 against the US dollar, in touching distance of the five-month high of $1.0953. That move alone nearly erased all euro losses sustained since Trump’s re-election.

The market response was swift. Trump's plan to slap a minimum 10% tariff on all US imports—and significantly higher rates on countries deemed repeat offenders—sparked immediate selloffs. China is now facing a 54% tariff when the new 34% penalty is added to the pre-existing 20%. 

The EU and Vietnam are also hit hard, with 20% and 46% tariffs respectively. Investors responded by dumping the US dollar across the board. Yields on 10-year US Treasuries fell sharply, touching their lowest point since October 2024 as investors shifted to safer assets on fears that the tariffs could choke off economic growth.

Currency traders weren’t the only ones rattled. While the euro, yen, pound, and Swiss franc all strengthened against the dollar, commodity-linked currencies like the Australian and Canadian dollars weakened. 

What Does This Mean for Me?

The broader fear now is that these tariffs might trigger a deeper global slowdown. Markets are beginning to price in not just lower growth, but also the rising possibility of a global recession. For forex traders, the week’s developments are a reminder that policy headlines can rapidly reshape sentiment—and portfolios