The exchange rate of the euro against the US dollar has once again caught the attention of analysts and investors. With the European currency trading around $1.1605, the possibility of even greater appreciation in the coming months is increasing, especially in light of factors that have been affecting the credibility of the United States as the main global monetary reference.
In recent years, countries such as China, Russia, Iran, India, and others in the BRICS bloc have adopted measures to reduce dependence on the dollar, in a de-dollarization strategy that has been gaining strength, including in bilateral and trade agreements. The movement occurs in response to sanctions, internal political instabilities in the US, and the perception that the dollar is being used as a geopolitical tool.
The devaluation of the dollar may create space for the euro, the traditional currency of the European Union, to gain greater prominence in international reserves and global trade. Additionally, the monetary policy of the European Central Bank (ECB) has maintained high interest rates to contain inflation, making euro-denominated assets more attractive to international investors.
Meanwhile, the Federal Reserve (Fed), the central bank of the US, has signaled a possible slowdown in the interest rate hike cycle, which reduces the attractiveness of the dollar compared to the euro. In parallel, political uncertainties in the United States, such as the presidential elections and potential government shutdowns, contribute to increased currency volatility.
Yield on products linked to the euro
In the cryptocurrency and stablecoin market, digital currencies linked to the euro — such as EURI — are gaining traction among users seeking diversification. Some platforms are offering annual yield (APR) of up to 8.64% on EURI balances, with daily liquidity, representing an alternative for both currency protection and passive income generation.
However, it is important to note that this yield may vary depending on the amount invested. In certain cases, the maximum APR is only valid for a fraction of the balance (for example, the first 300 EURI), while the excess amount yields at a lower rate, such as 1.64% per year.
Market expectations
Experts project three scenarios for the euro:
Positive: if the de-dollarization process advances and European stability is maintained, the euro could reach or exceed the range of $1.20.
Neutral: in case of balance between the blocs, the exchange rate should fluctuate between $1.16 and $1.18.
Negative: if there is instability in Europe or a recovery of confidence in the dollar, the euro may fall to $1.12 or less.
For now, investors attentive to this movement are reevaluating their strategies in a scenario where not only yield but also currency risk become central elements in capital allocation decisions.
