Recently, I looked back at the euro’s performance over the past 20 years and found that, in this period, it truly went through a great many ups and downs. From the 1.6038 peak in 2008, it slid all the way down to 1.034 in 2017, then to a 20-year low of 0.9536 in 2022. Along the way, the euro’s depreciation reflected the ups and downs of Europe’s economy.

The financial crisis in 2008 was a key turning point. The US subprime mortgage crisis put pressure on the global banking system, and European banks were no exception—credit tightening followed. Later, the European sovereign debt crisis erupted, with debt problems in countries such as Greece, Ireland, and Portugal coming to the fore, causing the market to cast doubt on the eurozone’s operating mechanism. The European Central Bank was forced to launch quantitative easing. While this stabilized financial markets, it also increased downward pressure on the euro.

What’s interesting is that when the euro rebounded in early 2017, it was mainly because the European debt crisis had basically been resolved. At that time, the ECB’s easing policies began to show results; economic data improved; unemployment fell to below 10%; the manufacturing PMI broke above 55; and market confidence in the eurozone was restored. Combined with smooth progress in the UK’s Brexit negotiations, political uncertainty declined, and capital started flowing back into Europe.

But after 2018, things changed again. The Federal Reserve began raising interest rates, the US dollar strengthened, growth in the eurozone slowed, and Italy’s political situation became unstable. By 2022, the Russia-Ukraine war disrupted global energy supplies, causing energy prices in Europe to soar, and in September the euro fell to 0.9536. However, the ECB then raised interest rates, ending the 8-year era of negative interest rates—only then did the euro’s slide begin to stop.

In early 2025, the euro weakened briefly again, falling to around 1.02. The main reason was that the economic outlook for the eurozone was not optimistic: Germany had two consecutive years of economic contraction, and France’s manufacturing activity was also very poor. At the same time, the Federal Reserve’s pace of rate cuts was slow, while the ECB had to increase the magnitude of its rate cuts; the widening US-EU interest-rate spread sent capital toward the US dollar. On top of that, after Trump took office, tariff threats further hit the eurozone’s export-oriented economy.

Interestingly, in January 2026, the euro suddenly rebounded to above 1.20. This was not because the euro itself became stronger; rather, the US dollar weakened broadly. Trump frequently attacked the independence of the Federal Reserve, and uncertainty around the “America First” policy led investors to “sell America,” triggering capital outflows, and the euro rose accordingly.

Looking ahead over the next five years, whether euro investments can generate profits will hinge on a few key factors. First is the divergence in monetary policy between the US and Europe: if the Federal Reserve continues to cut rates while the ECB keeps rates unchanged, the interest-rate differential will narrow, which could drive euro appreciation. Second is the eurozone’s economy, especially Germany’s fiscal expansion plans—if these are carried out smoothly, the euro could have a chance to rebound to the 1.20–1.25 range. Third are geopolitics and energy prices: if tensions ease and energy prices fall, it would be a clear positive for the eurozone’s trade conditions.

For investors in Taiwan who want to participate in euro investments, there are several ways. You can open a foreign exchange account through a bank, but there are relatively more capital restrictions. You can also use a forex broker platform; the capital threshold is lower and it’s suitable for small-sum investors. There are also options through securities firms and futures exchanges.

Overall, the odds of a relatively stronger euro trend in 2026 are higher—especially if the Federal Reserve continues cutting rates and energy-related risks ease. However, expecting a one-way rally without interruption is still quite challenging. Going forward, it’s worth paying attention to changes in the US-EU interest-rate spread, the progress of Germany’s fiscal implementation, and geopolitical risk.