Euro Surges to Four-Month High Amid Germany's €500 Billion Infrastructure Plan

The euro has surged to nearly four-month highs, driven by Germany's announcement of a €500 billion infrastructure fund and a historic debt overhaul that has boosted market confidence in European growth. This rally follows plans from the German government to relax borrowing rules for increased defense spending, aligning with broader EU initiatives to enhance military budgets. Analysts note that rising optimism about Europe's economic prospects may reduce the need for aggressive interest rate cuts by the European Central Bank, potentially providing a positive shock for the euro. However, the ongoing global trade tensions, particularly related to U.S. tariffs, pose risks to this growth outlook. As the euro strengthens, investors are closely monitoring the implications of these geopolitical dynamics and economic policy shifts on currency markets.