The euro exchange rate surpassed the 1.15 US dollar mark on Thursday, June 12, 2025, for the first time in about seven weeks, reaching a high of 1.1532 dollars. This is the highest level since April 22, 2025. This development is of great significance for private investors and savers, as currency exchange fluctuations have direct effects on international investments and the purchasing power of savings.
Background and Causes
The rise in the euro exchange rate is mainly attributable to a weakness of the US dollar. Speculation about possible interest rate cuts in the US has contributed to this, as recent US inflation data turned out to be surprisingly low. Additionally, speculation surrounding a potential worsening of the US budget deficit due to debates over a proposed tax cut law has further amplified the weakness of the US dollar.
Impact on Investors and Savers
Currency exchange fluctuations have significant impacts on international investments and the value of savings:
- International Investments: A stronger euro can make it more expensive for European companies to invest in the US or export to there, while it becomes cheaper for US investors to invest in Europe.
- Purchasing Power of Savings: For savers who hold savings in euros, a stronger euro may mean they receive more US dollars for their savings when they convert it to US dollars. Conversely, a weaker US dollar can decrease the value of savings in US dollars for European savers.
Current Developments and Forecasts
The euro has strengthened against the US dollar in recent months. In May 2025, the average exchange rate was around 1.106 dollars per euro, while for June 2025, an average rate of about 1.088 dollars was forecasted. However, recent developments indicate that the euro exchange rate has risen above 1.15 dollars, which exceeds the forecasts.
Overall, the currency exchange fluctuations reflect the economic and political uncertainties in both regions and significantly influence the decisions of investors and savers.