At the start of this year, the euro was one of the most popular trades in global markets. Investors expected the European Central Bank to keep raising interest rates while the dollar lost its shine, and in late January the single currency climbed above $1.20. The single currency recorded four straight weekly losses and earlier this week fell to as low as $1.116, its weakest level against the dollar since May 2025. Behind the fall are two crises arriving at the same time: an energy shock Europe cannot control and a French budget nobody seems able to pass. Together they have changed how investors see the euro, and they are now betting against it on a scale never seen before. So why is the euro falling, and how much further could it go?
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