The euro experienced a notable rise against the US dollar, reaching $1.04 at the beginning of March. This upward movement marks a rebound from a two-week low of $1.036 observed on the preceding Friday. The positive shift in the euro’s value is largely attributed to emerging news regarding potential increases in defense spending within the Eurozone, which has boosted market sentiment.
Fueling this sentiment, UK Prime Minister Keir Starmer announced that the UK and France are poised to spearhead a “coalition of the willing.” This coalition aims to develop a comprehensive plan, in collaboration with Kyiv and other allies, to resolve the ongoing Russia-Ukraine conflict and establish robust security guarantees, particularly for Washington. Germany is also anticipated to play a significant role in augmenting defense expenditures, with reports indicating the potential allocation of new special funds dedicated to defense and infrastructure projects.
Investors are keenly awaiting the upcoming policy meeting of the European Central Bank (ECB). Market expectations lean towards a fifth consecutive interest rate cut, although the economic data presents a mixed picture. Inflation within the Euro Area has shown a slight decrease to 2.4% in February. While this indicates a downward trend, it remains above projected forecasts. Core inflation, which provides a clearer picture of underlying price pressures, also declined to 2.6%, marking the lowest level since January 2022. However, this figure is still marginally higher than anticipated.
Recent data indicates that on Monday, March 3rd, the EURUSD exchange rate saw an increase of 0.0113 or 1.09%, settling at 1.0490, up from 1.0378 in the previous trading session. Historically, the Euro US Dollar Exchange Rate (EUR/USD) has reached a peak of 1.87 in July 1973. It’s important to note that the euro as a physical currency was officially introduced on January 1, 1999. However, by utilizing weighted averages of previous currencies, synthetic historical price data can be modeled to extend much further back in time, offering a broader perspective on the euro’s valuation against the dollar. The latest update to the Euro US Dollar Exchange Rate data was on March 3, 2025.
Looking ahead, projections from Trading Economics’ global macro models and analysts suggest that the EUR/USD exchange rate is expected to trade around 1.03 by the end of the current quarter. Furthermore, longer-term forecasts estimate the rate to potentially reach 1.02 within a 12-month timeframe.
This analysis provides a snapshot of the current dynamics influencing the euro to USD exchange rate, highlighting the interplay of geopolitical events, economic indicators, and central bank policies in shaping currency valuations.
