Euro Rally to $1.20 Spurs Buying and a Headache for the ECB

The euro’s ascent to its strongest level since 2021 is creating a problem for the European Central Bank.

Driven largely by dollar weakness, the common currency pushed through the closely watched $1.20 level this week and options markets suggest more gains are coming. Short-term bets are near their most euro-bullish since April, while longer-dated pricing is the most positive in almost six years.