Euro hits 4-month high, dollar weakness

The euro surged to a four-month high of $1.0920 against the dollar on Tuesday, driven by optimism that Germany will finalise a defence spending deal this week. Market sentiment was further boosted after Green Party co-leader Franziska Brantner signaled willingness to negotiate increased state borrowing, easing concerns over budget constraints.

Adding to the euro’s momentum, the US dollar weakened, with the dollar index falling to its lowest level since October amid growing fears of a potential US recession.

Meanwhile, Wall Street saw sharp declines overnight, with the Nasdaq plunging 4 per cent and the S&P 500 sliding 2.7 per cent. However, analysts cautioned that markets may have overreacted, as economic data has yet to confirm a deep slowdown in the US economy.

Attribution: Reuters

Subediting: Y.Yasser