The euro-dollar exchange rate has risen particularly strongly in recent days to the highest level since early November. It is mainly the weakness of the US dollar that is driving the exchange rate up.
In US dollar terms, the European currency rose to over $1,08 in recent days. Compared to the end of February, that is an increase of almost 4%, which is particularly strong in currency terms. The rate is also moving against the tide of interest rates, given that the Fed is using a higher rate than the ECB, which yesterday lowered the interest rate from 2,75% to 2,5%. But the euro continued to rise after that.
The recovery is due to the sudden weakness of the American economy. Instead of expected growth, economists see that there is an economic contraction. The trade wars that President Donald Trump is fighting with Mexico, Canada, China and Europe are also leading to a weaker dollar. Analysts assume that the depressing factors have now been priced into the exchange rate and therefore do not foresee a further recovery.
For European exporters of (agricultural) goods, the strong rise of the euro is not a favourable development on paper.