Euro Parity Threat Is Back on Trump Tariffs Risk, ECB Cuts
- Pictet warns that tough US tariffs could send EUR/USD to 1
- Demand for options that protect against a weaker euro surges
This article is for subscribers only.
The risk of the euro sliding to parity with the dollar is mounting in financial markets after this week’s interest-rate cut and a stark reminder that a Donald Trump presidency could spark a global trade war.
Just days after Trump suggested US tariffs could be aimed at Europe as well as China and other countries, European Central Bank President Christine Lagarde warned that any barriers would pose a “downside risk” for the bloc’s struggling economy. On Thursday, she delivered a second interest-rate cut in a row and sparked bets on even more aggressive reductions to come.