Euro Rebounds Amid Ukraine Peace Talks and Defense Spending Boost

The euro strengthened against the dollar after a dip, sparked by renewed efforts for peace in Ukraine and potential increased defense spending in Europe. The U.S. dollar index fell slightly, while analysts speculate on tariff impacts and a positive cryptocurrency announcement by Trump regarding strategic reserves.

The euro rebounded from a recent low against the dollar on Monday, driven by fresh momentum in Ukraine peace negotiations and prospects of increased defense expenditure in the eurozone. The currency rose 0.3% to $1.0404, recovering from a previous low following tense discussions between Trump and Zelenskiy.

European leaders, welcomed by UK Prime Minister Keir Starmer, are charting a peace plan for presentation to Washington. Minna Kuusisto, chief analyst at Danske Bank, emphasized Europe's urgent need for a strategy to continue supporting Ukraine amid potential U.S. aid withdrawal.

Amid these developments, the trade dynamic remains a concern, with the Commonwealth Bank of Australia predicting a continued dollar rally and potential tariff escalations. Meanwhile, Bitcoin neared $95,000 amid Trump's inclusion of it in strategic reserves, signaling a significant catalyst for the crypto market.

(With inputs from agencies.)