The European Central Bank published research in its latest review of the international role of the euro indicating that the euro showed safe-haven characteristics during several risk-off episodes in 2025 and early 2026. Historically, the euro has appreciated only modestly in global stress events, but the analysis finds that, from April 2025, some United States-driven shocks saw the euro rise alongside the Swiss franc and Japanese yen while the US dollar weakened. The research also notes that the US dollar continued to retain its broader safe-haven role overall. As examples, the ECB points to the US administration's tariff announcement on 2 April 2025, when the euro posted sizeable gains while US Treasury yields rose and the dollar fell, and to later US-origin episodes including Department of Justice subpoenas to the Federal Reserve and renewed tariff threats on European imports. By contrast, the outbreak of war in the Middle East initially pushed the euro lower against the dollar because the United States benefited from an energy-related terms-of-trade shock while the euro area, as a net energy importer, faced the opposite effect. The report also cites higher convenience yields on German Bunds, multi-year highs in foreign purchases of euro area debt and equities by end-2025, and a USD 82 billion drop in official US Treasury holdings in custody at the New York Federal Reserve to USD 2.7 trillion in March 2026. It concludes that deeper and more integrated euro area capital markets would help the euro absorb volatile inflows more efficiently and support its international role.

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