Hello everyone and welcome to today's finance channel. Today, we are discussing the recent performance of the Euro. During Friday's European trading session, the Euro-to-Dollar exchange rate continued to fall, reaching its lowest level since November 2022. This decline is primarily due to market expectations that the European Central Bank (ECB) will have to cut interest rates significantly to boost the Eurozone economy.

Specifically, the Euro fell by more than 1% against the Dollar, hitting $1.0335. The latest data shows that business activity in the two largest economies of the Eurozone contracted more than expected. The market now expects a 50-basis-point rate cut by the ECB next month, with a probability of over 50%.

Meanwhile, escalating geopolitical tensions have also boosted demand for safe-haven currencies, with the Dollar on track to record its largest weekly gain in over a year. Matthew Landon, a global market strategist at JPMorgan Private Bank, noted that a 50-basis-point rate cut is on the table, and shorting the Euro has become their "top pick" in the foreign exchange market.

The Euro has also been one of the worst-performing G10 currencies over the past few months. The prospect of high tariffs under a potential Trump presidency could hurt export-dependent economies in the region. Additionally, Germany and France are grappling with domestic political crises, further eroding investor confidence.

Traders are increasingly betting that the Euro may continue to slide towards parity with the Dollar, a scenario that has only occurred twice since the Euro's inception in 1999. Kristoffer Kjaer Lomholt, head of FX research at Danske Bank, stated that the Euro is "under immense pressure." S&P Global data shows that the Eurozone Purchasing Managers' Index (PMI) fell to a 10-month low of 48.1 in November, below the 50 threshold, indicating a significant weakening of the Eurozone economy.

Christian Mueller-Glissmann, head of asset allocation research at Goldman Sachs, believes that the escalation of hostilities between Ukraine and Russia has cast a long shadow over the region, adding to the uncertainty. He argues that Europe needs lower interest rates, and the manufacturing sector needs lower rates as well.

While it remains uncertain whether the ECB will accelerate its rate-cutting pace, multiple factors are putting pressure on Europe, making us quite bearish on all assets in the region. Thank you for watching today's episode,