The euro edged lower in European trading on Friday against a basket of global currencies, extending losses for a second consecutive session against the US dollar and hovering near a four-month low. The currency is on track for its largest weekly decline since 2024, weighed down by surging global energy prices triggered by the fallout from the Iran war, which is expected to negatively affect economic activity in Europe.

The crisis is likely to push prices higher and accelerate inflation across the eurozone, placing policymakers at the European Central Bank under growing inflationary pressure.

At the same time, the European economy may require additional monetary support to counter slowing activity, creating a difficult balance between containing inflation and supporting growth.

Price Overview

Euro exchange rate today: the euro declined about 0.1% against the dollar to $1.1603, down from the opening level of $1.1610, after touching a session high of $1.1621.

The euro ended Thursday’s trading down 0.2% against the dollar, resuming losses that had paused the previous day during a brief recovery from a four-month low of $1.1530.

Weekly performance

Over the course of this week’s trading, which officially concludes with today’s settlement, the euro is down about 1.8% against the US dollar, on track for its second weekly loss in the past three weeks and its largest weekly drop since April 2024.

US Dollar

The dollar index rose more than 0.1% on Friday, maintaining gains for a second consecutive session while trading near its highest level in four months, reflecting the strength of the US currency against a basket of global peers.

The rise comes as investors buy the dollar as a preferred safe-haven asset, with the Iran war entering its seventh day and fears growing of a broader conflict in the Middle East. These concerns have driven energy prices sharply higher and increased downside risks for the global economy.

Strong US economic data and renewed speculation about inflationary pressures on the Federal Reserve have also reduced expectations for US interest rate cuts during the first half of this year.

Investors are awaiting the US February jobs report later today, which the Federal Reserve closely monitors in determining the path of monetary policy.

Global energy prices

Global oil and gas prices surged as a result of the US–Israeli war on Iran, which disrupted energy exports from the Middle East. Iranian attacks on ships and energy facilities led to the closure of shipping routes in the Gulf and halted production from Qatar to Iraq.

Brent crude rose about 18% this week, reaching a 20-month high of $86.22 per barrel, while European gas prices jumped more than 70% since the end of last week.

Views and analysis

Analysts at Wells Fargo said in a note that the euro faces a difficult situation. Europe’s natural gas storage refill season is about to begin, and the European Union is entering the season with record-low gas levels in storage, meaning it will need to purchase large amounts of energy at a time when prices could rise significantly.

George Saravelos, head of global FX research at Deutsche Bank, said the impact of the Iran war on the euro/dollar pair revolves around one key factor: energy.

Saravelos added that a negative supply shock is currently forming, effectively acting as a direct tax on Europeans that must be paid to foreign producers in US dollars.

Analysts at ING wrote in a research note that the European Central Bank’s position has suddenly come into question, and they doubt the issue can be resolved in the very near term.

They added that the possibility of the ECB raising interest rates poses a serious risk to interest rate carry trades and could lead to a significant widening in eurozone government bond spreads.

European interest rates

Following higher-than-expected inflation data released this week in Europe, money markets sharply reduced pricing for a 25-basis-point rate cut by the European Central Bank in March from 25% to 5%.

Investors are now awaiting additional economic data from the eurozone on inflation, unemployment, and wages to reassess these expectations.

The Japanese yen fell in Asian trading on Friday against a basket of major and secondary currencies, extending losses for a second consecutive session against the US dollar and heading toward a third straight weekly decline, as investors continue to favor the US currency as a safe-haven alternative amid the fallout from the Iran war.

The Japanese currency slipped to its lowest level in six weeks, prompting Japan’s finance minister to warn against excessive moves in the foreign exchange market, stressing that authorities could intervene to support the local currency if necessary.

Weak labor market data in Japan also reduced expectations for a near-term interest rate hike, as investors await further evidence regarding the Bank of Japan’s monetary policy path this year.

Price Overview

Japanese yen exchange rate today: the dollar rose against the yen by 0.15% to ¥157.75, up from the opening level of ¥157.55, after touching a session low of ¥157.38.

The yen ended Thursday’s trading down 0.3% against the dollar, resuming losses that had paused the previous day during a brief recovery from a six-week low of ¥157.97.

Weekly performance

Over the course of this week’s trading, which officially concludes at today’s settlement, the Japanese yen is down about 1.15% against the US dollar, on track for a third consecutive weekly loss.

US Dollar

The dollar index rose more than 0.1% on Friday, maintaining gains for a second consecutive session and trading near its highest level in a month and a half, reflecting the strength of the US currency against a basket of global currencies.

The rise comes as investors buy the dollar as a preferred safe-haven asset, with the Iran war entering its seventh day and fears growing of a wider conflict in the Middle East. These concerns have driven energy prices sharply higher and increased downside risks for the global economy.

Strong economic data from the United States and renewed speculation about inflationary pressures on the Federal Reserve have also reduced expectations for US interest rate cuts during the first half of this year.

Investors are now awaiting the US February jobs report later today, which the Federal Reserve closely monitors in determining the path of monetary policy.

Japanese finance minister

Japanese Finance Minister Satsuki Katayama said this week that financial officials are monitoring markets closely with a “strong sense of urgency.” When asked about the possibility of currency market intervention, she said Japan reached a mutual understanding with the United States last year.

Japanese interest rates

Data released this week in Tokyo showed Japan’s unemployment rate rose to 2.7% in January, above market expectations of 2.6%, after recording 2.6% in December.

Following this data, market pricing for a 25-basis-point rate hike by the Bank of Japan in March fell from 15% to 5%.

Pricing for a 25-basis-point rate increase in April also dropped from 40% to 25%.

In the latest Reuters poll, the Bank of Japan is expected to raise interest rates to 1% by September.

Analysts at Morgan Stanley and MUFG wrote in a joint research note that they had already viewed the probability of a rate hike in March or April as low, but with rising uncertainty stemming from developments in the Middle East, the Bank of Japan is likely to adopt a more cautious stance, further reducing the chances of a near-term rate hike.

Investors are now waiting for additional data on inflation, unemployment, and wages in Japan to reassess these expectations.

Ethereum’s price recently climbed above the $2,100 level, a significant move that has drawn the attention of investors. Notably, the rally occurred without encountering major price resistance, which is typically viewed as a sign of market optimism. However, investor behavior is showing mixed signals regarding the cryptocurrency’s possible future direction.

Market value to realized value ratio raises caution

Ethereum’s market value to realized value (MVRV) ratio has recently moved into positive territory, marking its first such rise in roughly a month and a half. Normally, an increase in this indicator is considered a bullish signal.

However, in bearish market conditions, such a rise can turn into a sell signal, as investors may seek to take profits or recover previous losses. This scenario could unfold for Ethereum, as some investors might take advantage of the recent price increase to sell, especially if overall market sentiment shifts.

Although a rising MVRV ratio is typically viewed positively, it may be less reliable under current market conditions. The recent price surge in Ethereum could attract profit-taking, particularly from short-term traders looking to capitalize on the rally. This could create selling pressure in the near term even if the broader upward trend temporarily continues.

Long-term holders support the price

Despite the possibility of short-term selling, Ethereum’s long-term holders are showing strong signs of accumulation. The net position change indicator for long-term holders suggests they are increasing their Ethereum holdings.

This sharp rise in accumulation reflects confidence among investors who have the financial capacity to endure market volatility. Their behavior may help prevent a sharp price decline, as their long-term outlook makes them less likely to sell during short-term fluctuations. This dynamic could act as a stabilizing factor for Ethereum’s price during periods of uncertainty.

Price outlook

Ethereum’s price currently faces a degree of uncertainty, though expectations still lean toward the upside. Strong buying momentum, reflected in the Money Flow Index (MFI) moving into positive territory, indicates that short-term gains may continue.

Historically, when the MFI crosses into positive territory, it often triggers a short rally that could support the current upward movement.

With strong support from long-term accumulation, Ethereum may continue to rise. The 20-day exponential moving average (EMA) is acting as a key support level, increasing the likelihood of a move above $2,165 and possibly toward $2,313. Breaking these resistance levels could generate further bullish momentum.

However, if upward momentum weakens or selling pressure increases, the price could undergo a correction that brings Ethereum back to the $1,902 support level, potentially invalidating the bullish outlook. In that scenario, the cryptocurrency may continue trading within a range for an extended period with limited upside potential.

In October 2025, a striking event unfolded on the global stage that clearly exposed a major vulnerability for the Western world. Yet most people in the United States barely noticed it.

It began when President Donald Trump publicly threatened to impose a 100% tariff on China starting November 1, 2025. In response, Beijing did not retreat. Instead, it quietly warned that it could halt exports of all processed rare earth materials to the United States.

What followed was largely overlooked by mainstream media: Trump quickly stepped back from the threat. November 1 arrived and passed without the tariffs ever taking effect.

If you did not notice this development, you are not alone. There is a fundamental reality that the media does not consistently report: China holds a level of strategic leverage over the West that goes far beyond trade surpluses and semiconductor chips. For decades, China has dominated the processed materials that keep US fighter jets flying, help guide US missiles with precision, enable American drones to operate, and sustain large parts of modern industry.

If China were ever to cut off this supply, the consequences could be severe.

That is why REalloys (NASDAQ: ALOY) may be one of the most strategically important companies most investors have never heard of. By the end of 2026, REalloys is expected to become the first commercial producer of heavy rare earth metals and alloys in North America.

The company’s facility in Euclid, Ohio is already delivering defense-grade materials under US government contracts. It is also building the first fully integrated North American supply chain independent of China, from mining through final magnet manufacturing.

The timing is critical. New US defense procurement rules will take effect on January 1, 2027, effectively banning Chinese-origin rare earth materials in American weapons systems. Less than a year remains before the deadline. Only a handful of companies globally are capable of producing heavy rare earth materials that meet these requirements.

Warning: America’s most dangerous strategic vulnerability

The facts are troubling, and perhaps even more concerning is how few people are aware of them.

China controls roughly 90–95% of global rare earth processing capacity. This refers to processing rather than mining, an important distinction because rare earth elements themselves are not truly rare. They exist in mineable quantities in Canada, the United States, Brazil, Greenland, and elsewhere. The real issue is that the West abandoned its ability to transform raw materials into usable metals and magnets about four decades ago.

China filled that gap by building a complete processing infrastructure and eventually dominating the market. The country’s dominance is so extensive that nearly every rare earth magnet used in Western defense systems, vehicles, electronics, and industrial equipment ultimately traces back to Chinese processing.

Beijing maintains this control through a strict licensing system. Rare earth exports are approved monthly, allowing China to increase or reduce shipments and potentially use them as a diplomatic tool. Japan has experienced this pressure before, which is why the Japanese government maintains a strategic rare earth stockpile covering several months of domestic demand, alongside reserves held by private companies.

The bigger surprise is that the United States has no strategic reserve of processed rare earth materials. Europe does not either. Western defense and industrial sectors largely operate on just-in-time supply chains that depend on a geopolitical rival.

These materials are widely used across modern technologies.

An F-35 fighter jet contains roughly 435 kilograms of rare earth elements.

A modern destroyer carries about 2 to 2.5 tons.

Nuclear submarines contain around 1.5 tons.

They are also essential for missile defense systems, precision-guided weapons, drone motors, electric vehicle engines, wind turbines, robotics, and medical devices.

If these materials suddenly disappeared, as one expert described it, the world would be left sitting exposed under a gray sky. Almost everything today either contains rare earth elements or depends on products manufactured with them.

Modern warfare runs on Chinese magnets

One of the clearest examples of this risk can be seen on the battlefield in Ukraine.

The Russia-Ukraine conflict has been described as the largest transformation in warfare since World War I. The technology driving that shift is drones. Ukraine produced about 1.2 million drones in 2024 alone, and nearly all of the magnets inside those systems were manufactured in China.

This means a country fighting for survival against an adversary aligned with China depends entirely on Chinese components to operate a key part of its military capability.

The issue will only expand as drones dominate future battlefields, from small consumer models to large military systems. None of them function without rare earth magnets.

Without Chinese magnets there would be no drones, no precision-guided missiles, and no advanced fighter jets.

Even 1% dependence means full dependence

The problem is even more complex because many companies claiming independence from China still rely on Chinese technologies indirectly.

Rare earth projects worldwide often depend on Chinese separation equipment, Chinese smelting furnaces, Chinese chemical inputs, and Chinese spare parts. Even graphite electrodes used in furnaces are commonly imported from China, meaning if those supplies stop, the furnaces stop as well.

Canada’s Saskatchewan Research Council has developed its own separation technologies without Chinese systems, including smelting processes that incorporate artificial intelligence.

The billion-dollar mistake

The challenge lies less in mining and more in the extremely complex industrial processing required afterward. This includes multiple chemical separation stages, conversion of oxides into metals at temperatures exceeding 1200°C, and highly precise alloy manufacturing.

Research institutions say this manufacturing capability is the most difficult part to rebuild outside China because it requires years of accumulated experience, not simply financial investment.

North America’s only full platform

Few companies in North America possess a fully integrated rare earth supply chain like REalloys, which combines mining, processing, and final magnet manufacturing.

Future production targets include:

About 525 tons annually of neodymium-praseodymium metals.

Around 30 tons of dysprosium oxide.

15 tons of terbium oxide.

In the second phase, capacity could expand to:

200 tons of dysprosium annually.

45 tons of terbium.

Up to 18,000 tons per year of rare earth magnets.

The gap is widening

Even well-funded competitors are struggling to catch up because rare earth processing requires years of technical expertise, not just capital.

REalloys has also secured significant strategic support, including preliminary approval for $200 million in financing from the US Export-Import Bank, along with partnership agreements with Japanese entities.

The countdown has begun

Demand for rare earth magnets is expected to increase by three to five times over the next decade, driven by electric vehicles, energy infrastructure, defense systems, robotics, and artificial intelligence.

Yet supply chains remain heavily concentrated in China, while Beijing continues tightening restrictions on exports of technologies related to this industry.

The real question is no longer whether the West needs to build an alternative. The question is whether it can do so before another major crisis emerges or before China decides to use this strategic leverage more aggressively.