European markets experienced growth, with the euro appreciating against the dollar, reaching its highest level since the US election. The uptick occurred amid increasing worries about a “Trumpcession,” which led to the diminishing popularity of the “Trump trade” and the strengthening of other significant currencies. The dollar has lost ground against a range of global currencies and in the US stock market following the introduction of new tariffs and fears of recession.
The euro surged to a high above $1.09 for the first time since early November, reversing a trend that began with Donald Trump’s election victory. US tariffs on countries including Canada, Mexico, and China have intensified fears of an American recession.
After a stock market downturn on Monday, Asian indices were more stable, with Wall Street futures, Treasury bond yields, and cryptocurrencies recovering slightly. Investment trends have been adjusted in response to fears that aggressive tariffs and government spending cuts could slow US growth.
In Europe, the Dax in Germany rose by 0.7%, the French market increased by 0.5%, and the Italian Borsa was up by 0.3%. However, the FTSE 100 in London decreased by 0.2%. Market sentiment remains fragile as previous bullish predictions are tempered by concerns over aggressive tariffs and spending cuts.
Tesla shares have plummeted amid a backlash against Elon Musk, one of Trump’s key allies. Tesla’s stock value has plummeted by more than half since its peak in December. Trump accused “Radical Left Lunatics” of an “illegal and collusive” boycott of Tesla after a 15% decline in its shares.
The Swiss investment bank UBS has raised its risk assessment for a potential US economic downturn to 30%, up from 25% from the end of last month. The euro and the Japanese yen are among those benefiting as investors ditch the US dollar.
The European single currency’s surge is attributed to several factors, including the winding down of the Trump/tariff trade, Germany’s shift in fiscal policy, a hawkish stance on interest rates by the European Central Bank, weaker than expected US economic data, and a possible ceasefire in Ukraine. Despite this, some analysts are optimistic that the euro could reach $1.15 this year and $1.20 by 2026.
Source: https://www.theguardian.com/business/2025/mar/11/european-markets-euro-dollar-trumpcession-us-shares
