As investors retreat from US dollar, Euro rises to $1.20

The euro strengthened to $1.20 for the first time since mid-2021 on Tuesday, driven by an investor retreat from the U.S. dollar that has gathered pace since the start of this year.

The euro EUR= rose 1.4% to $1.2049, its highest since June 2021.

The single currency has historically traded just below $1.20 on average since its creation in 1999. But it's much lower than the record $1.60 in 2008.

President Donald Trump's erratic approach to trade, international relations and fiscal and monetary policy since the start of his second term in 2025 have made some investors wanting to limit exposure to assets like the dollar itself.

European currencies have been major beneficiaries of this reduction in dollar exposure. In the last 12 months, the euro has gained 14%, while the Swiss franc CHF= has risen 15% and the Swedish crown SEK= has gained almost 20% in value.

-Amanda Cooper and Saqib Iqbal Ahmed/Reuters