Quick overview
- The US dollar is experiencing a comeback as risk appetite returns, causing the EUR/USD pair to drop below key levels.
- Despite a dovish stance from the European Central Bank, the euro initially rebounded but is now retreating toward 1.14.
- US equity markets are rallying, with major indices like NASDAQ and S&P 500 seeing significant gains driven by improving investor sentiment.
- European stock indices closed mostly higher, supported by strong corporate earnings and easing macroeconomic concerns.
A USD comeback is underway as risk appetite returns and EUR/USD slips below key levels, while DAX and other Euro stock indices close higher.
Tariff Sentiment Swings Spark EUR/USD Reversal
In early 2025, the US dollar gained strength as speculation around new tariffs fueled demand, pushing the EUR/USD pair close to parity. However, that rally reversed course in February. Market expectations shifted, and the euro staged a significant rebound, climbing past 1.15, even as the European Central Bank (ECB) adopted a dovish tone and introduced a rate cut.
Despite ECB easing, the euro’s bullish momentum was supported by cooling US inflation data and softer macro signals. Yet, that trend appears to be taking a breather this week.
USD Finds Support Again, EUR/USD Retreats Toward 1.14
Today, the US dollar is regaining ground, partially unwinding recent losses. The EUR/USD pair fell sharply, dropping over a full cent from yesterday’s peak of 1.1573 to as low as 1.1425, currently hovering around 1.14.
The move follows fresh remarks from US Treasury Secretary Bessent, who suggested that a de-escalation in US-China trade tensions is likely “in the very near future.” While not a major market-moving headline, it was enough to trigger profit-taking and repositioning, especially as President Trump has refrained from aggressive tariff rhetoric in recent sessions — a signal that some traders interpret as a possible push for new trade deals.
📈 Stocks Rally as Short Covering Accelerates
Equity markets are seeing a strong session, especially in the US. While European indices posted modest gains, US markets surged higher: NASDAQ is up +2.8%, S&P 500 is gaining +2.34%, Dow Jones Industrial Average is up +2.45% at the moment.
At the session’s peak, major indices tested their 50- and 100-hour moving averages, helped by a combination of short covering and improving investor sentiment.
Closing Levels for Major European Stock Indices – April 22
European markets ended mostly higher on Monday, with broad gains across Germany, France, the UK, and Spain. Italy’s minor decline stood out in an otherwise upbeat session. Market sentiment was lifted by strong corporate earnings and easing macroeconomic concerns, setting a cautiously positive tone for the week ahead.
🇩🇪 Germany’s DAX 40
Gained +91.04 points or +0.43%, closing at 21,296.91.
Investors showed renewed optimism amid easing geopolitical tensions and steady German business sentiment data.
🇫🇷 France’s CAC 40
Rose by +40.60 points or +0.56%, settling at 7,326.47.
French equities benefited from strong earnings reports in the luxury and consumer sectors.
🇬🇧 UK’s FTSE 100
Advanced +52.96 points or +0.64%, ending the session at 8,328.61.
The index was buoyed by energy and mining stocks, helped by stabilizing commodity prices.
🇪🇸 Spain’s IBEX 35
Climbed +92.61 points or +0.72%, closing at 13,010.60.
Gains were driven by bank stocks and continued recovery in domestic demand.
🇮🇹 Italy’s FTSE MIB
Was the only major index to decline, slipping -32.55 points or -0.09% to finish at 35,947.89.
Italian stocks underperformed slightly as investors took profits after recent highs.
Conclusion: Markets Catch Their Breath Before Next Trade Headlines
Today’s trading reflects a tactical shift back toward the US dollar amid a pause in negative trade rhetoric and a strong performance in equities. While EUR/USD remains elevated compared to January levels, the pair is facing renewed downside pressure as market participants watch closely for further trade updates and central bank signals. The next decisive move could hinge on actual policy changes rather than speculative headlines.
German Stock Index Dax Live Chart
DAX
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank’s local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
