Recently reviewing the euro's 20-year trend, I found many investment opportunities worth paying attention to.

Looking at the historical exchange rate chart of the euro, 2008 was a critical turning point. At that time, the euro against the US dollar surged to a record high of 1.6038, then began to decline sharply. That year, the US subprime mortgage crisis erupted, and the European banking system was severely impacted, with large amounts of capital flowing back to the US for safety. Coupled with the European Central Bank being forced to cut interest rates and initiate quantitative easing, the euro's depreciation pressure persisted for several years.

The real turning point came in early 2017. After nearly nine years of decline, the euro finally rebounded after hitting a low of 0.9534 in January. By then, the European debt crisis had been resolved, and the ECB's easing policies had started to take effect, with unemployment rates falling and manufacturing PMI breaking through 55, restoring market confidence in the European economy. Additionally, progress was made in Brexit negotiations, and US political uncertainty increased, leading to capital inflows into the euro. By February 2018, the euro rose to 1.2556, reaching a multi-year high.

But the good times didn't last. The Federal Reserve began raising interest rates in 2018, strengthening the US dollar index, which put pressure on the euro again. The euro also experienced shocks from the Russia-Ukraine war in 2022, dropping to 0.9536 at one point, hitting a 20-year low. During that period, energy crises and soaring inflation occurred, and the ECB was caught in a dilemma.

Interestingly, looking at the entire trajectory of the euro's historical exchange rate, I found that this recent rebound is quite noteworthy. In early 2025, the euro briefly fell to around 1.02, but from March onward, it rebounded rapidly, and by the end of January this year, it even broke through 1.20 for the first time since June 2021. This isn't because the euro has strengthened, but because confidence in the US dollar has waned. Trump repeatedly attacked the Fed's independence and threatened tariffs, raising concerns among investors about US policies, leading to capital flows "selling the US."

Looking ahead, the euro's performance in the coming years depends on several key factors. First is the US-Europe interest rate differential. If the Fed continues to cut rates while the ECB maintains rates, narrowing the spread will support euro appreciation. Second is Germany's fiscal stimulus plans, which are crucial for the eurozone economy. Additionally, if geopolitical tensions ease and energy prices fall, it will significantly benefit European business costs and economic growth.

Based on current conditions, the euro is expected to trend stronger by 2026. Especially if the US-Europe interest rate gap continues to narrow and energy risks ease, the euro could stay in the 1.20-1.25 range. In the long term, under fiscal stimulus and monetary policy support, the euro's performance should be relatively stable. Of course, geopolitical issues and energy prices remain important variables to monitor.

If you're interested in investing in euros, you can do so through bank forex accounts, forex brokers, or futures exchanges. For small investors, forex CFD platforms have lower capital requirements and are also good options. The key is to keep an eye on changes in the US-Europe interest rate differential, Germany's fiscal progress, and geopolitical risks.