Good news for Americans in France as dollar strengthens against euro
It comes ahead of Donald Trump’s second term, amid sluggish European growth predictions
On Thursday January 2, the euro hit 1.025 USD, its lowest level since October 2022
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The euro is at its lowest level against the US dollar for two years, offering a welcome boost for Americans who live in France and have dollar income / savings, or those looking to move to the country.
On Thursday January 2, the euro hit 1.025 USD, its lowest level since October 2022. The euro has been falling due to concerns about the economic outlook in Europe at the same time as the dollar is being boosted due to Donald Trump's anticipated return to the White House on January 20.
The European currency has struggled in the face of political instability and structural issues. Mr Trump has also threatened to impose further tariffs on European goods, increasing the risk of a “trade war” on regularly-exported goods.
Central banks
The behaviour of central banks has also increased the trends.
In the US, the Federal Reserve is expected to cut interest rates less aggressively than expected, due to predicted changes as a result of Trump's policies. For example, it is now only planning two interest rate cuts this year, as opposed to the four previously anticipated.
In contrast, in Europe, economic analysts have said that the European Central Bank (ECB) is likely to cut rates at a faster pace than the Federal Reserve, particularly as inflation is running close to the ECB's 2% target, and predicted growth is low (although inflation is expected to fall and stabilise in France).
Read also: Good news on cost of living in France as inflation set to fall in 2025
The US dollar also strengthened against the British pound, reaching its highest level ($1.24 per £1) since April last year.
