In just one month, the euro has become a relatively stable currency, buoyed by expectations of rate changes and some feeling that Europe has been left behind by the conflict, convert in one of the great indirect casualties of the Iran war.
At the end of February, when I started the military climb, the EUR/USD cross moved comfortably from around 1.20 to carefully look for the 1.15 zone. To those who do not follow the currency market, the movement may seem small, but in reality A depreciation of around 5% is expected in just one weekhuge for developed coin.
The simplest explanation is also the most intuitive. Europe imports energy, the United States exports it. When oil suffers a 40% drop in a month and much of the global government is affected, the market realizes that the European economy is much more vulnerable than the American one.
Germany, Italy or Spain are energy-intensive economies that are dependent on global logistics cycles which today are more expensive, slower and more uncertain. States, on the other hand, can even partially benefit from high oil prices through energy production, gas exports and the ability to attract capital when the world panics.
For this reason, pain behaves as it always does in moments of tension: refugio uniform.
Oil and gas will turn into inflation, transport into inflation and food into inflation if the crisis spreads
But limiting the analysis to costs would cut it short. It is also interesting to see what happens to the euro against other currencies.
The Swiss franc has disappearedon the central counter, it is the only one to maintain low levels of types until 2024, again into the candle, as the market turns to reward the stability, neutrality and low energy exposure of the current economy. Including the pound, because of the UK’s structural problems, it held up better than the euro partly because the market faced a much more aggressive Bank of England.
The Iran war completely changed the previous situation. Suddenly oil and gas will turn into inflation, transport into inflation and food into inflation if the crisis spreads.
What seemed like a long journey of lesser types will take much more than a long pause or even an unexpected sudden rush. Some ECB members, especially from Germany, were forced to clarify this a cash hold in April or January cannot be cancelled.
The paradox is that a more aggressive ECB could support the euro in the short zone, but not necessarily because the economy was doing well until inflation was forced to respond. And that’s usually bad news. Suffering types in the context of strong growth can make a fortune.
A much more dubious euro may be a boon for Germany, for exporters and for part of the industrial sector
Suffer types because oil disappeared, confidence and inflationary amenaza s inquistarse is another story. The market may buy the euro during the week, but it will be hard to lose a cent due to the slowing economy. It depends on expensive energy, which is starting to deteriorate as its industrial coastline begins to deteriorate.
However, this does not mean that the world has automatically become a world of severe pain over the years. I think that the hegemony of the dollar is entering a phase of slow decline that appears until the end of this new era in Ecuador.
Not because it will disappear, nor because there is a clear alternative until more countries try to reduce their dependence, diversify reserves and sell outside of common money. The problem is that the ends of hegemony are never linear.
Sometimes this question requires structural strength while gaining tactical strength. And that is exactly what can happen now, with one coin the global influence is eroded little by little, but that Then you are an automatic refuge when the world goes into panic mode.
Furthermore, it is best to remember that uniforms are not just a consequence of the market. I am also a political tool.
Scott Bessent recently weighed in on the various opportunities Washington is seeing in pursuit of the yen, and he doesn’t seem particularly uncomfortable with the idea of indirectly influencing certain areas that are seen to help stabilize the economy or protect strategic sectors.
This opens an uncomfortable door, the idea that in an environment of war, inflation and industrial rearmament, money can stop floating freely and become a geopolitical tool as well.
Therefore, I believe that the euro has a deeper problem than it appears. If the ECB survives the debate, it can be immediately recoveredif oil suffered or if war raged.
But the underlying scenario is getting more complicated. Europe enters 2026 with more expensive energy, less fluid international trade, higher logistics costs and an industry in desperate need of competitiveness.
A much larger euro can be a boon for Germany, for exporters and for part of the industrial sector. But it also interferes with imports, promotes inflation and erodes purchasing power.
In a world where energy wants to dictate monetary policy and war wants to mark the price of money, Europe does not need a strong currency at all costs, but a uniform compatible with life in a much more hostile world.
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