Euro drops on dollar strength, German political crisis

The euro fell to $1.0775, heading for a weekly decline, weighed down by a stronger dollar and political instability in Germany, where Chancellor Olaf Scholz’s coalition government collapsed on Wednesday.

Euro drops on dollar strength, German political crisis

Opponents and business leaders are calling for new elections to address the uncertainty. The week also saw Donald Trump’s re-election as US president, sparking concerns in Europe about potential economic consequences, including tariffs on critical industries such as autos and chemicals and impacts on security and support for Ukraine.

Fed, bank of England cut rates; ECB expected to follow in December

Meanwhile, as expected, the Fed and the Bank of England reduced rates by 25 basis points in November. The European Central Bank is also likely to follow with a 25bps cut in December, with markets anticipating a drop to 2% by June.