FX.co ★ Euro Rallies Past $1.18

The euro advanced to over $1.18, marking its highest level since mid-September, as the US dollar continued its decline from last week. This movement occurred amid increased market caution regarding possible intervention in the yen by Japan and in anticipation of the Federal Reserve's policy announcement scheduled for Wednesday. Although it is largely anticipated that the Fed will maintain the current interest rates, investors are keenly observing any signals about the timing of a potential rate cut, especially with growing speculation that a more dovish successor to Fed Chair Jerome Powell could be appointed this week. Concurrently, investors stayed vigilant concerning heightened geopolitical and trade tensions. Initially, US President Donald Trump threatened several European nations with new tariffs in a move associated with Greenland, but later retracted following the announcement of a framework agreement aimed at a future deal. Additionally, he cautioned that the US might impose 100% tariffs on Canada if it proceeded with a trade agreement with China.