The euro turning point only needs to focus on 1.116!

Euro: How Will the Huge Divergence Between Stocks and Currencies Conclude?

The euro and European stocks mostly have a synchronous relationship, reflecting the health of the economy, and this has been the case for many years.
The decline in European stocks due to Trump's tariffs is a market reaction to the expectations of future recession and risk-averse sentiment; before the tariffs, the fundamentals in Europe had already begun to deteriorate.
In recent years, Europe has faced severe geopolitical issues, especially the Russia-Ukraine war and the energy crisis, compounded by the impact of tariffs, which has dealt a heavy blow to an already fragile European economy.
It can be seen that since the end of last year, the euro's import volume has far exceeded its export volume, and the trade balance has clearly turned downward. In this context, the euro's effective trade exchange rate remains near historical highs, driving up the euro, which further affects corporate earnings expectations and impacts European industry and the stock market.
In the short term, the rise of the euro is a passive increase, influenced by Trump's weak dollar governance expectations, rather than an active rise of the euro. A high euro exchange rate is extremely damaging to the economy, and a phase reversal should occur soon, especially to observe whether the ECB (European Central Bank) intervenes.

Currently, there may still be tail risks of a liquidity crisis in the market, which I mentioned in my writing on the tail risks of U.S. stocks, as well as the impact of the volatility index on the market.
A short-term liquidity crisis could be a huge risk that crushes the euro and pushes up the dollar.
After all, in a liquidity crisis, there is only one safe haven: the dollar.
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