The US dollar is falling as the euro rises at the beginning of trading, so what is the reason.

The US dollar fell to its lowest level in more than two months down to the levels of 106.13, before returning and rising again today.

The US dollar fell by more than 3% from its peak in January as traders concluded that the beginning of Donald Trump's second term was mostly threats of tariffs, and the decline in US Treasury bond yields led to further declines for the dollar due to increasing bets on further cuts by the Fed this year, amid growing concerns about the US economy.

At the level of economic data this week, we will wait for the second estimate of the fourth quarter growth figures in the United States and the data of the core Personal Consumption Expenditures price index for January, which is the Fed's preferred indicator for measuring inflation.

This week it is possible that the markets will respond well to any economic data point.

On the other side of the eurozone, the euro rose to the highest level in a month after Germany's Conservatives won the national elections as expected, and Friedrich Merz is set to become the next chancellor of Germany after his party won Sunday's elections, although he faces complicated and lengthy coalition negotiations after the rise of the far-right Alternative for Germany party to a historic second place in a divided vote.

Forecasts indicate that it is difficult to see the next German government able to provide more to the economy than a short-term positive impact such as