Last year at the beginning of the year, the US dollar was really strong, I remember during that time the dollar index soared past 108, and the euro against the dollar dropped to around 1.03, hitting multi-year lows. At that time, many people were discussing whether the euro would really fall to parity with the dollar.

The reasons for the euro's weakness are actually quite complex. On one hand, new policies brought tariff pressures, impacting European exports; on the other hand, the European Central Bank cut interest rates more aggressively than the Federal Reserve, widening the interest rate differential, which naturally made the dollar more valuable. Plus, political instability in Germany and France also contributed to putting heavy pressure on the euro.

JPMorgan Chase and Deutsche Bank both predicted that by the end of the year, the euro could reach parity with the dollar, truly having a chance to hit that psychological threshold. This was the first time since 2022 that the euro approached this level again. Wall Street analysts believe that the euro might still be the weakest among the G10 currencies because the uncertainty in US policies and Europe's structural issues won't be resolved so quickly.