ECB’s Nagel: Euro’s Surge Looks Overstated When Judged Solely Against Dollar

Euro's rally faces reality check from ECB heavyweight.

THE DOLLAR DILEMMA

Nagel slams single-currency tunnel vision—calling out analysts who treat EUR/USD as the only metric that matters. The Bundesbank president argues this myopic focus distorts the true picture of European monetary strength.

BEYOND THE PAIR

He pushes for broader assessment frameworks that capture the euro's actual global standing. The commentary lands as traders obsess over every basis point movement—because apparently, complex economies can be reduced to a single currency pair.

Another day, another central banker explaining why the simplest metric isn't the smartest one—while hedge funds keep getting rich on exactly that simplicity.

Euro’s ‘global moment’ risks slipping away amid political division

As concern over Donald Trump’s trade policy pushed the dollar toward multi-year lows, ECB President Christine Lagarde, in late May, used a Berlin speech to urge Europe’s leaders to act, saying alarm over Trump’s challenge to the economic status quo was a chance to advance the goal of boosting the single currency’s influence.

Building on last year’s proposals for sweeping to Europe’s financial system, Lagarde referred to it as the “global euro moment.” Her thinking, a source familiar with her view said, was straightforward. Convinced this could be a defining moment, France’s former finance minister wasn’t too pleased by the lack of political leadership and thought the void should be filled by one voice. Four months on, that push has faded.

Moves that might have made the euro more attractive to investors have been sidelined, the sources said. Proposals for jointly issuing debt in euros to fund Europe’s defense sector faced a lot of resistance from Paris and Berlin. Smaller countries with bigger financial sectors were against the centralization of supervisory powers in the European bodies. Furthermore, plans for the creation of the digital euro still aren’t clear.

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