The euro has surged nearly 1% against the dollar today – moving to $1.1076 – climbing 0.94% to its highest since Donald Trump was elected US president in November, as the dollar weakened broadly on worries over his disclosure of information to Russian officials.
Mr Trump faces a torrent of criticism, with the disclosure slate yesterday roiling the administration as it struggled to move past the backlash over his abrupt firing of FBI Director James Comey, who was investigating the president's ties to Russia, last week.
That political turmoil, analysts said, is playing out via the dollar, whose broad index had risen to 14-year highs earlier this year on the view that Mr Trump's plans for tax cuts and infrastructure spending would boost growth and inflation, but which fell to six-month lows today.
Fears are growing among investors that Mr Trump might not last his first term, analysts said, and that even if he does, there are too many political distractions for him to be able to push through his economic stimulus programme.
"(The story about Trump and Russia) probably is playing out as a weaker dollar on the view that Trump may not be around long enough to deliver his tax reform, which is at least partially priced into the dollar," said RBC Capital Markets currency strategist Adam Cole, in London.
With the dollar down across the board, the euro has been the main beneficiary of its weakness, reaching $1.1077, its highest since November, with analysts saying the fact that it had broken past the important $1.10 level meant investors had to close bets against the currency and buy it back, which had exaggerated the move.
Meanwhile, the euro is also performing well against sterling today, gaining 0.87% to 85.77p shortly before 6pm Irish time.
€30 billion worth of demand for a French debt sale might also have spurred euro buying.
Data released earlier showed the euro zone growing at 1.7% year-on-year in the first quarter, in line with expectations.
