The EUR/USD has seen a rebound due to broad-based US Dollar weakness and easing political risks in France. The pair is approaching last year's high of 1.1919, with a potential break above this level opening the door for a rise above 1.2000. MUFG Senior Currency Analyst Lee Hardman highlights the impact of US policy uncertainty and the recent political developments in France on the Euro's performance.

Euro gains amid US Dollar weakness

"Broad-based US dollar weakness has helped to lift EUR/USD back to within touching distance of the high from last year at 1.1919 from 17th September. A break above that level would open the door for the pair to rise back above the 1.2000-level for the first time since the first half of 2021."

"Heightened US policy uncertainty at the start of this year is contributing to a loss of confidence in the US dollar in the near-term as evident by the recent divergence between yield spreads and US dollar performance."

"At the same time, the euro has benefitted from a reduction in political and fiscal risks in France over the past week."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)