Euro Rebounds to 4-Year High Amid Continued Aversion to Dollar-Denominated Assets

Bridgette Randall
26 Jun, 2025
London

European markets edged higher and attempted to erase losses in the previous session amid a shaky truce in the Middle East. 

Benchmark indexes in Frankfurt, Paris, Milan, and London edged higher as investors reassessed the risks of global crude oil supply in the Strait of Hormuz. 

Market indexes hovered near record highs, and crude oil prices fell to the level before the start of the Israeli bombing of Iran's nuclear infrastructure on June 14. 

Despite Israel's overwhelming military superiority, the Jewish nation's aerial bombing campaign failed to dislodge the present government and strike fatal blows to its nuclear program. 

The tentative ceasefire is holding for now, but two nations are likely to trade attacks in the near future, amid Israel's vows to conduct additional and precision strikes deep into Iran.

Brent crude oil prices hovered near the level before the start of the Iran-Israel war earlier in the month. 

Moreover, the euro edged to the high not seen since 2021 amid general weakness in the U.S. dollar and investors seeking safe haven in non-U.S.-dollar-denominated assets. 

 

Europe Indexes and Yields

The DAX index increased by 0.5% to 23,625.17, the CAC-40 index edged higher 0.4% to 7,589.01, and the FTSE 100 index advanced 0.1% to 8,725.40.

The yield on 10-year German bonds inched lower to 2.54%, French bonds decreased to 3.23%, the UK gilts moved down to 4.46%, and Italian bonds edged lower to 3.48%.

The euro increased to $1.17; the British pound was higher at $1.37; and the U.S. dollar was lower and traded at 80.13 Swiss cents.

Brent crude increased $0.21 to $67.89 a barrel, and the Dutch TTF natural gas was higher by €0.06 to €35.43 per MWh.

 

Europe Movers

H&M Hennes & Mauritz AB increased 5.4% to SEK 136.70 after the Sweden-based apparel retailer reported weaker-than-expected sales in the fiscal second quarter but guided an uptick in demand to kick-start the summer season. 

Net sales increased to SEK 55.33 billion from SEK 53.67 billion, net income declined to SEK 590 million from SEK 1.24 billion, and earnings per share fell to 37 cents from 77 cents a year ago.

Defense stocks rallied following NATO's commitment to increase defense spending to 5% from 2% of gross domestic product but failed to agree on a deadline. 

Rheinmetall AG rose 3.1% to €1,791.50, Safran SA added 0.8% to €265.70, BAE Systems plc inched higher 0.8% to 1,853.0 pence, and Rolls-Royce Holdings PLC advanced 0.8% to 923.80 pence.