Recently, as I looked at the future trend of the euro, I found that over the past 20 years, the euro has gone through quite a few twists and turns.

Starting with the 2008 financial crisis, the euro surged to a historic high of 1.6038, only to fall all the way to 1.034 in 2017—a drop of more than 35%. What happened in Europe during that time? There was pressure on the banking system, credit tightening, an economic recession, and on top of that, the euro debt crisis—at one point, investors’ confidence in the euro collapsed. But precisely because of this, by 2017 the euro was actually severely oversold. Then, as the European Central Bank’s quantitative easing began to take effect, economic data improved, and the euro started to rebound.

In 2018, the euro briefly pushed up to 1.2556, but the Fed’s continued rate hikes, the slowdown in economic growth in the eurozone, and political risks in Italy all dragged the euro down again. By September 2022, the impact of the Russia-Ukraine war pushed the euro down to 0.9536, setting a new 20-year low. However, as the ECB began raising interest rates and energy prices gradually fell, the euro got back on its feet.

When it comes to the euro’s recent future trend, I think there are several key factors worth paying attention to. Earlier this year, the euro did weaken briefly to around 1.02, mainly because eurozone economic data was not good: Germany shrank for two consecutive years, and France’s manufacturing sector also looked very bad. But starting in March, the euro rebounded rapidly and even broke above 1.20 at one point—behind this, in fact, was a reflection of wavering confidence in the US dollar.

Expectations that the Fed would cut rates frequently, doubts about the independence of the Fed, and the volatility of Trump’s policies all led to capital starting to flow out of the US dollar. At the same time, because inflation in Europe was relatively stable, expectations were that the European Central Bank would keep interest rates unchanged; as the interest-rate differential between the US and Europe narrowed, that became the main driver supporting the euro. That’s also why I believe the euro’s future trend is still tilted bullish.

But to see how far the euro can go, we still need to watch a few variables. If Germany’s fiscal expansion plans proceed smoothly, the eurozone economy could improve, which would help the euro rebound against the US dollar back into the 1.20–1.25 range. In addition, geopolitics and energy prices are also crucial: if the conflict eases and energy costs fall, it would be a clear positive for growth in the eurozone economy.

As for ways to invest in euros, there are actually quite a few. You can open a foreign exchange account through a bank, or find a foreign exchange broker to do CFD trading, since the capital threshold is relatively low. Some securities firms also offer foreign exchange trading, or you can simply go into the futures market. Which method to choose mainly depends on your investment style and the size of your capital.

Overall, based on factors including the divergence in monetary policies between the US and Europe, Germany’s fiscal stimulus, and easing geopolitical risks, I remain relatively optimistic about the euro’s future trend. But to keep rising in one direction all the way, the difficulty is indeed not low. Going forward, it’s still important to closely monitor changes in the US-Europe interest-rate differential, Germany’s progress on budget implementation, and geopolitical developments—these will directly affect the euro’s performance.