The euro rose in the European market on Monday against a basket of global currencies, continuing its recovery for the second day in a row from a four-week low against the US dollar, as buying continued from low levels, in addition to the decline in US currency levels due to Trump's tariff moves.


With inflationary pressures easing on European Central Bank policymakers, the prospect of at least one European interest rate cut this year has revived, and to reprice those prospects, traders are awaiting a key speech later today from ECB President Christine Lagarde.


Price overview
Euro exchange rate today: The euro rose against the dollar by about 0.5% to ($1.1835), from Friday's closing price of ($1.1778), and hit a low of ($1.1788) during today's trading.


The euro ended Friday's trading session up less than 0.1% against the dollar, its first gain in three days, after hitting a four-week low of $1.1742 the previous day.


Apart from buying from low levels, the euro rebounded after better-than-expected data was released on the performance of key sectors in Europe during February.


The euro lost 0.75% against the dollar last week, its second weekly loss in the last three weeks, due to renewed expectations of a European interest rate cut this year.


US dollar
The dollar index fell 0.45% on Monday, extending its losses for the second consecutive session and moving away from a one-month high, reflecting the continued decline in the US currency against a basket of major and minor currencies.


Apart from profit-taking, the US dollar is declining following a historic decision by the US Supreme Court, which ruled on Friday that Trump's sweeping tariffs exceeded his authority.


Trump responded by strongly criticizing the court, raising tariffs from 10% to 15% on imports starting Tuesday, and insisting on maintaining high tariff agreements with trading partners.


Sim Moh Seong, currency strategist at OCBC Bank in Singapore, said: “This decision weakens the dollar, as it may benefit economic growth outside the United States.”


Seong added that the long-term implications for exchange rates are less clear, as a decline in US revenues is likely to negatively affect the fiscal situation and the dollar, while limiting Trump's power may be a positive thing, by reducing one source of trade policy volatility.


European interest rate
Recent data released in Europe showed a decline in key inflation levels during December, indicating a slowdown in inflationary pressures on the European Central Bank.


Following that data, the money market's pricing of the likelihood of the European Central Bank cutting European interest rates by about 25 basis points next March rose from 10% to 25%.


Traders have revised their expectations from the European Central Bank keeping interest rates steady throughout this year to at least one cut of around 25 basis points.


In order to reprice the above probabilities, traders are awaiting later today the speech of European Central Bank President Christine Lagarde at the National Economic Policy Conference of the National Association for Business Economics, in Washington, D.C.


The Wall Street Journal reported that Christine Lagarde intends to complete her term at the European Central Bank.