The euro surged past $1.18, its strongest level since mid-September, as the US dollar extended last week’s losses amid heightened market caution over potential yen intervention in Japan and ahead of the Federal Reserve’s policy announcement on Wednesday. While the Fed is widely expected to keep rates unchanged, investors are closely watching its guidance for clues on the timing of the next rate cut, with speculation rising that a more dovish successor to Fed Chair Jerome Powell could be named this week. Meanwhile, investors remained alert to elevated geopolitical and trade tensions. US President Donald Trump initially threatened several European countries with new tariffs as part of an effort linked to Greenland, before reversing course following the announcement of a framework agreement toward a future deal. He also warned that the US could impose 100% tariffs on Canada if it were to conclude a trade agreement with China.
