Market Outlook: Euro Nearing Two-Year Low Against Dollar

Forex - The Euro is trading near itslowest level against the U.S. dollar in the last two years, ahead of Donald Trump's inauguration for a second term as President of the United States on January 20. Trump's proposed trade tariffs are expected to weaken the already struggling Eurozone economy and urge the European Central Bank to implement comprehensive interest rate cuts. In contrast, due to expectations that customs tariffs and other policies will be inflationary, the U.S. Federal Reserve is anticipated to limit its rate cuts. By 2025, the market is pricing in a 113 basis point cut from the ECB compared to a 45 basis point reduction from the Fed. The Euro fell by 0.1% to 1.0351 dollars, approaching the two-year low of 1.0336 dollars reached on November 22.