Euro becomes alternative safe-haven asset

The euro is experiencing its most rapid growth in 15 years, and momentum doesn’t appear to be slowing. Traders anticipate further gains, with some suggesting the currency could reach $1.20, prompting strategists to revise their forecasts.

Economic uncertainty caused by US tariff policy has challenged the dollar's credibility and allowed the euro to claim its place as a safe-haven currency. As a result, the euro hit the highest level in three years. Investors are reconsidering the dollar's position. This has made the euro the main beneficiary of the dollar's weakening.

Trading strategists are trying to predict the further movement of the euro. So far, none of them expects the currency to rise above $1.15 this year. However, hedge funds are targeting to reach the level of $1.20 over the next 3–6 months.

According to the Depository Trust & Clearing Corporation data, three out of four option contracts bought on Friday were bets on the euro appreciating against the dollar.

Still, there are alternative views on the euro's growth. Valentin Marinov of Credit Agricole SA considers the euro-dollar pair to be overbought, and the French bank's positioning model has switched to a short euro position.