Euro moves in a positive zone before Lagarde's testimony

The euro rose in European trading on Thursday against a basket of global currencies, moving in positive territory for a second consecutive day versus the US dollar, supported by weakness in the US currency amid uncertainty surrounding President Trump’s tariff policies.

The euro’s gains come ahead of European Central Bank President Christine Lagarde’s testimony before the European Parliament in Brussels, where her comments are expected to provide fresh clues on the path of European interest rates throughout this year.

Price Overview

• Euro exchange rate today: The euro rose about 0.2% against the dollar to 1.1829, compared with an opening level of 1.1810, after recording an intraday low at 1.1804.

• The euro ended Wednesday’s session up 0.3% against the dollar, marking its third gain in the past four days, supported by recovery buying from a four-week low at 1.1742.

US Dollar

The dollar index fell 0.15% on Thursday, extending losses for a second straight session, reflecting continued weakness in the US currency against a basket of major and minor currencies.

This decline followed President Donald Trump’s State of the Union address to Congress, which increased market uncertainty as it failed to provide sufficient reassurance about trade policy stability after the Supreme Court invalidated previous tariffs.

The US Supreme Court ruled on Friday that the emergency tariffs imposed by President Donald Trump were invalid. In response, Trump activated new tariffs under a rarely used law known as “Section 122,” which allows duties of up to 15% but requires congressional approval to extend them beyond 150 days. Trump said he would use the 150-day window to develop new tariffs that comply with legal frameworks.

US Trade Representative Jamieson Greer said on Wednesday that tariff rates on certain countries could rise to 15% or higher, compared with the recently imposed 10% rate, though he did not specify which trading partners would be affected.

European Interest Rates

• Money market pricing for a 25-basis-point rate cut by the European Central Bank in March remains stable around 25%.

• Traders have adjusted expectations from keeping rates unchanged throughout this year to pricing in at least one 25-basis-point cut.

Christine Lagarde

To reprice those expectations, investors later today will closely watch ECB President Christine Lagarde’s testimony before the European Parliament’s Economic and Monetary Affairs Committee, scheduled to begin at 08:30 GMT.

Euro Outlook

At FX News Today, we expect that if Lagarde’s comments come in more hawkish than markets currently anticipate, expectations for ECB rate cuts this year would decline, leading to further gains in the euro against a basket of global currencies.