Euro reaches 2025 high while the stocks fall most in 7 months

The euro rose to its highest level in 2025 fueled by expectations of increased European defense spending.

The official currency of 20 European countries rose 0.5% against the U.S. dollar, on Tuesday reaching about 1.05 US dollars, its strongest level since December 10th of last year.

That came after the European Commission announced plans to extend 150 billion euros, or 158 billion U.S. dollars in loans to boost defense budgets across the continent.

Meanwhile, European stock markets tumbled amid concerns over U.S. President Donald Trump's tariff policies.

The pan-European STOXX 600 index fell 2.1%, hitting its lowest level since August 2024. Investors fear that tariffs recently imposed on Canada, Mexico, and China could further weaken global economic growth and might also be extended to Europe.