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Euro meltdown as currency plummets while Donald Trump claims US election victory.l

The Euro has taken a beating against the US dollar as Donald Trump declared himself the winner of the 2024 US presidential election.

Euro paper money

The Euro hit four month lows as Donald Trump declared victory. (Image: Getty)

The Euro hit a four-month low as Donald Trump announced his US election victory, dropping nearly 2% as fears of US tariffs soar.

The US dollar index jumped 1.5% – the biggest surge since March 2020 – hitting the Euro hard amid fears of US tariffs on European goods and potential interest rate hikes in the US.

The currency was down nearly 2 cents as of 7:40am GMT, hitting a four-month low. However, European stock futures rose, including the pan-European Stoxx 600 and Germany’s DAX.

Economists are already ringing the alarm bell that Trump’s victory could increase the price of consumer goods through his proposed trade tariffs, tax cuts, and hardline immigration stance.

Moments after his victory, which he called the “greatest political movement of all time”, the Euro plummeted, having the worst day since before the Covid pandemic.

Nigel Green, CEO of deVere Group, said: “Tariffs are not just political tools; they are an economic burden that Americans are already bearing. Tariffs act as a tax on imports, which inevitably gets passed down to consumers.

“While Trump’s stated goal is to protect American industries, the effect of tariffs is to raise the cost of a wide range of products. Items from electronics to clothing become more expensive as manufacturers and retailers pass the added costs on to the consumer.

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“The impact of Trump’s tariffs, we believe, will be clear: Higher prices for everyday goods. While the goal is to protect American businesses, the reality is that these tariffs could contribute to the very inflationary pressure that Trump promises to relieve.”

Trump’s economic policies could result in the Federal Reserve – the US central banking system – adopting stricter policies to support the dollar further.

Otavio Costa, a macro strategist at Crescat Capital, warned that the Federal Reserve is now under pressure to cut interest rates to strengthen the dollar.

He wrote on social media platform X: “With a Fed that’s compelled to cut rates despite clear signs of bottoming inflation. This is one of the most challenging environments for the USD that I have seen in my career.”

There are also hopes that a Trump administration could ease current economic sanctions on Russia, causing stocks in Vladimir Putin‘s country to spike.

In the automotive industry, Trump has promised to lower taxes, energy costs, and red tape for foreign car makers if they increase US production.

However, this could also result in “very substantial tariffs” on non-US-made vehicles. Jacob Kirkegaard, a senior fellow at the Brussels-based think tank Bruegel, said car manufacturers should be “very worried”.

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He told DW: “All the investments that the German automakers made into the US in recent years isn’t going to save them. Because of the level of investment and integration made in recent years, they will probably face a bigger supply chain shock than most others.”

Republican Presidential Nominee Donald Trump Holds Election Night Party

Trump made a victory speech in Florida this morning. (Image: Getty)

Trump’s Vice President, JD Vance, emphasised the importance of the US economy in his victory speech in West Palm Beach, Florida. He said: “We just witnessed the greatest political comeback in the history of the United States of America.

“Under President Trump’s leadership, we’re never going to stop fighting for you, for your dreams, for the future of your children.

“After the greatest political comeback in American history, we’re going to lead the greatest economic comeback in American history under Donald Trump’s leadership.”

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