Recently someone asked me, will the euro fall again? Honestly, that's a good question because the euro's trend indeed reflects the major shifts in the global economy over the past few years.

I noticed many people only see the 20-year low of 0.9536 in September 2022 and think the euro will keep weakening. But if you look at a longer timeline, you'll find the story of the euro is much more complex.

Going back to the 2008 financial crisis, the euro once hit a historical high of 1.6038, then fell over 35%. At that time, the US subprime mortgage bubble burst, and the European banking system also collapsed, leading to credit tightening that made it hard for businesses and consumers to borrow. Coupled with the subsequent euro debt crisis, the entire eurozone was hit hard. The European Central Bank cut interest rates and implemented quantitative easing, but these measures actually contributed to the euro's depreciation.

Fast forward to early 2017, the euro dropped to around 1.034, its lowest in nearly nine years. But you know what? This extremely oversold condition, along with the resolution of the euro debt crisis, improving economic data, and the fading of Brexit uncertainties, actually marked the start of a rebound. That wave saw the euro rise to 1.2556 in February 2018, a three-year high at the time.

However, later the Federal Reserve started raising interest rates, strengthening the dollar, and political turmoil in Italy put pressure on the euro again. That’s what I want to emphasize—the euro exchange rate has never been one-way; it reflects the relative strength between the US and Europe.

Now, back to your question: will the euro fall again? My view is, probably not in the short term.

Why? Because the situation has changed. In early 2026, the euro broke through the 1.20 level mainly because dollar confidence was shaken. Trump’s frequent attacks on the Fed’s independence and threats of tariffs created policy uncertainties that led investors to start "selling dollars." Meanwhile, the Fed continued to cut rates, while the European Central Bank maintained rates due to relatively stable inflation, narrowing the US-Europe interest rate gap, which is bullish for the euro.

More importantly, Germany is implementing a large-scale fiscal expansion plan. If this plan proceeds smoothly, the eurozone’s economic growth outlook should improve, and the euro could stay in the 1.20–1.25 range. Energy prices have also been falling recently, and although the Russia-Ukraine situation persists, it’s no longer the market’s main focus, which benefits European corporate costs.

But I have to be honest—will the euro fall again? The answer depends on several variables. If the Fed suddenly stops cutting rates or the ECB is forced to follow with significant rate cuts, causing the US-Europe interest rate differential to widen again, the euro will definitely be pressured downward. If geopolitical tensions escalate suddenly, energy prices spike again, or Europe faces stagflation, capital might shift into the dollar for safety.

So my judgment is: in the medium term, the euro should remain relatively stable, but don’t expect a continuous rally. The economic fundamentals of the eurozone are still weaker than the US, which is a structural issue. If you want to go long on the euro, I suggest paying attention to three indicators: changes in the US-Europe interest rate differential, the progress of Germany’s fiscal stimulus, and geopolitical and energy risks.

If you’re interested in investing in euros, bank forex accounts can serve as a basic allocation, but with more restrictions. CFD platforms have lower capital requirements and are suitable for those wanting flexible trading. Brokerage firms and futures exchanges also offer euro-related products, depending on your risk appetite and trading style.

In summary, will the euro fall again? The probability is low in the short term, but long-term risks always exist. That’s why I keep emphasizing the importance of looking at a longer timeline—20 years of history shows us that the euro has never been short of surprises.