By Keith Jenkins – Mar 16, 2011 6:37 AM ET – Bloomberg
As of early 2025, the euro has seen fluctuations against the US dollar, with rates reaching as high as 1.0792 USD per euro on March 5, 2025
Update 2024
Portugal’s Economic Resurgence and the Euro’s Strength
Since the debt crisis of the early 2010s, Portugal has undergone significant economic transformation. By 2024, the country has emerged as one of Europe’s stronger economies, driven by a combination of tourism, tech sector growth, and improved fiscal management.
The euro, which struggled during the European debt crisis, has since regained stability. Although the common currency remains volatile due to inflation concerns, interest rate adjustments by the European Central Bank (ECB), and global economic conditions, it is trading at a much higher level than its crisis-era lows.
Portugal’s credit rating has also improved over the years. Moody’s upgraded Portugal’s sovereign rating in 2023, reflecting better economic performance, a declining debt-to-GDP ratio, and increased investor confidence. The country now attracts foreign investment in renewable energy, technology, and infrastructure.
However, challenges remain. Portugal faces a housing affordability crisis due to rising real estate prices driven by foreign investors and tourism demand. Additionally, the euro area still deals with inflationary pressures and geopolitical uncertainties that impact financial markets.
Analysts remain optimistic about Portugal’s economic trajectory but emphasize the need for continued fiscal discipline and investment in innovation to maintain long-term growth.
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The euro halted three days of gains versus the dollar as Moody’s Investors Service downgraded Portugal’s credit rating, reviving concern about Europe’s ability to solve its debt crisis.
The 17-nation common currency depreciated versus all but two its major counterparts after Portugal was cut two steps by Moody’s yesterday to A3, four steps from so-called junk status. The rating company said its outlook remained negative given Portugal’s “subdued growth prospects” and risks that the government won’t be able to implement deficit-reduction plans.
“The euro’s under pressure after Portugal’s downgrade,” said Jane Foley, a senior strategist at Rabobank International in London. “Momentum for euro buying has waned.”
The euro declined 0.3 percent to $1.3954 as of 10:11 a.m. in London. It rose to $1.4013 yesterday, the strongest since March 7. The currency weakened 0.4 percent versus the yen, trading at 112.57.
Technical analysis suggests the euro’s outlook has worsened after its failure to sustain gains past $1.40, Foley said.
Portugal “faces significant challenges, not least a less supportive economic environment,” Moody’s said in a statement late yesterday. The country’s gross domestic product is expected to “decline this year and experience a weak recovery at best in 2012,” Moody’s said.
Finance ministers from the euro countries failed on March 14 to decide how to bring the emergency aid fund up to its full 440 billion euros ($615 billion) from around 250 billion euros currently. Luxembourg’s Jean-Claude Junker said a “few points of detail” might not be settled by the March 24-25 summit. He called another gathering of euro-area finance ministers for March 21.
To contact the reporters on this story: Keith Jenkins in London at kjenkins3@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
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