Personal Finance
Trump policy nudges euro toward parity with U.S. dollar
Oscar Wong | Moment | Getty Images
Euro is expected to hit parity with the dollar
Economists expect the euro to fall to or even below parity with the U.S. dollar next year. That would mean the currencies had a 1:1 exchange rate.
The euro is used by 20 of the 27 nations in the European Union: Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain.
The currency most recently hit parity with the dollar in 2022, for the first time in two decades, before rebounding.
Now, euro parity is “back on the cards,” James Reilly, senior markets economist at Capital Economics, wrote in a research note Nov. 11.
“The euro has suffered more than most in the wake of Trump’s victory and we doubt that will let up anytime soon,” he wrote.
As of 10 a.m. ET on Friday morning, 1 euro equaled about $1.06. That’s down about 3% from roughly $1.09 as of market close on Election Day.
The ICE U.S. Dollar Index (DXY) was also recently on a winning streak, Reilly told CNBC. Last week marked the eighth straight week of gains in the index, an “extreme run” that had only happened three times since 2000, Reilly said.
Travelers can try to take advantage of these currency dynamics by delaying a purchase until next year. For example, a European hotel or tour that allows you to book now for 2025 but pay later lets you defer the expense — understanding, of course, that it’s not a guarantee the euro will continue to weaken against the dollar.
Tariffs, interest rates and a strong economy
Tariffs and trade policy are major factors influencing euro-USD currency dynamics, economists said.
Trump has floated broad tariffs on global trading partners.
On the campaign trail, he proposed tariffs of 10% or 20% on all imports, which would include those from the European Union. He vowed Monday to impose an additional 10% tariff on China, and 25% tariffs on all products from Canada and Mexico, on his first day in office, signaling his willingness to implement import taxes.
The ultimate scope and magnitude of tariff policy are unclear, however.
The euro has suffered more than most in the wake of Trump’s victory and we doubt that will let up anytime soon.
James Reilly
senior markets economist at Capital Economics
Tariffs on Europe could reduce demand for its exports, causing Europe’s economy to weaken and the euro to lose value, economists said.
Interest-rate differentials also have a large influence on relative currency movements, economists said. They expect the interest-rate spread between the U.S. and eurozone to widen due partly to tariff impact.
Tariffs are expected to “be inflationary for the U.S.,” Reilly said. Those import taxes are paid by U.S. businesses, which generally pass their higher costs onto consumers.
U.S. Federal Reserve officials may keep interest rates higher for longer to bring inflation back to their long-term target. Meanwhile, economists expect the European Central Bank to keep cutting rates.
Tariffs on the eurozone would probably lead the ECB to cut rates further, in a bid to prop up the European economy, creating a widening rate differential that “pretty dramatically” favors the dollar, said McKenna of Wells Fargo.
There are other factors, too.
For one, the U.S. economy has “held up a lot better than anyone has been expecting” over the past year or two, in stark contrast with Europe, Reilly said.
Also, financial markets dislike uncertainty, McKenna said.
If question marks around Trump administration policy unsettles markets in the short term, investors would likely seek out safe-haven assets denominated in U.S. dollars, such as U.S. Treasury bonds, thereby strengthening the dollar, McKenna said.
Of course, there’s a risk Europe retaliates with its own tariffs or somehow penalizes Americans by raising certain consumer prices, such as airfares, Reilly said.
“We don’t think that will happen,” he said. “We think Europe wants as free trade as it can.”
The escalating battle between the Trump administration and Harvard University over international student visas could come at a high economic cost.
Altogether, international students who studied in the U.S. contributed $43.8 billion to the U.S. economy in the 2023-24 academic year, according to the most recent data by NAFSA: Association of International Educators. In Massachusetts, alone, international students contributed nearly $4 billion and supported more than 35,000 jobs.
At Harvard, the share of international students is disproportionately high compared to most other colleges and universities. International students accounted for 27% of Harvard’s total enrollment in the 2024-25 academic year, up from 22.5% a decade earlier.
With more than 6,000 international students, Harvard supports over 1,125 local jobs and contributes $180 million to the greater Boston economy, largely through student spending, according to a new analysis by Implan, an economic software and analysis company.
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A ban on international enrollment could destabilize a vital revenue stream, said Bjorn Markeson, an economist at Implan.
“Because Harvard has a very high international student population, it’s going to have more of that impact,” Markeson said. “The economy is a network structure, so dollars flow through. They don’t just stay in one place — and when something hits Boston, it affects New England as a whole.”
A Harvard University student walks through Harvard’s campus.
Erin Clark | Boston Globe | Getty Images
Schools have increasingly sought out international students “because they compliment the student body, and that benefits all students,” said Robert Franek, The Princeton Review’s editor-in-chief.
But foreign students also typically pay full tuition, which makes international enrollment an important source of revenue for Harvard and many colleges and universities in the U.S., according to Franek.
Where the Trump, Harvard battle stands
For now, the fate of international enrollment at Harvard and elsewhere is still up in the air.
Tensions between the federal government and the Ivy League university have continued to escalate after Harvard in April refused to meet a set of demands issued by the Trump administration’s Task Force to Combat Anti-Semitism.
In May, President Donald Trump attempted to ban Harvard from enrolling international students, but a federal judge issued a temporary restraining order on Friday “to maintain the status quo.”
U.S. District Judge Allison Burroughs said the restraining order would remain in effect until June 20. Meanwhile, Harvard President Alan Garber said that “contingency plans are being developed to ensure that international students and scholars can continue to pursue their work at Harvard this summer and through the coming academic year.”
In an interview with NBC News on Friday, U.S. Secretary of Education Linda McMahon said Harvard needs to do more to combat antisemitism on campus and screen admissions of foreign students.
A sign in front of the entrance of the Security Administration’s main campus on March 19, 2025 in Woodlawn, Maryland.
Kayla Bartkowski | Getty Images
The Supreme Court on Friday granted the Department of Government Efficiency access to Social Security Administration data that includes sensitive personal information of millions of Americans.
The decision comes as the federal government sought a stay, or temporary suspension, after a federal judge blocked DOGE’s access to that data in April. The nation’s highest court granted an emergency application from the Trump administration to lift that injunction; the case is expected to proceed in lower courts.
In its decision, the Supreme Court concluded the Social Security Administration may give DOGE access to agency records while the case plays out “in order for those members to do their work.”
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Both the White House and the Social Security Administration called the Supreme Court decision a victory. In a statement, White House spokesperson Elizabeth Huston said it will allow the Trump administration to “carry out commonsense efforts to eliminate waste, fraud and abuse and modernize government information systems.”
Likewise, Social Security Commissioner Frank Bisignano in a statement said the agency “will continue driving forward modernization efforts, streamlining government systems, and ensuring improved service and outcomes for our beneficiaries.”
Yet others expressed grave concern in reaction to the decision, including Justice Ketanji Brown Jackson, advocacy groups and plaintiffs in the case against DOGE and the Social Security Administration.
“This is a sad day for our democracy and a scary day for millions of people,” said the coalition of plaintiffs including American Federation of State, County and Municipal Employees; the American Federation of Teachers; and the Alliance for Retired Americans, who are represented by Democracy Forward.
“This ruling will enable President Trump and DOGE’s affiliates to steal Americans’ private and personal data,” they said, while vowing to “use every legal tool at our disposal” to prevent the misuse of public data as the case moves forward.
Millions of Americans’ sensitive data at stake
The dispute focuses on how much access DOGE should have to Americans’ personal data.
The plaintiffs filed an initial complaint in early March, stating the Social Security Administration had “abandoned its commitment to maintaining the privacy” of the sensitive personal information of millions of Americans under DOGE’s influence.
The Social Security Administration collects and stores some of the “most sensitive” personally identifiable information of millions of Americans, ranging from seniors to adults to children, the complaint notes.
When applying for a Social Security number, the agency requires the disclosure of place and date of birth, citizenship, ethnicity, race, sex, phone number and mailing address. It also requires parents’ names and Social Security numbers.
But the agency is also privy to other personal data, including personal health information, the complaint notes. That includes:
- driver’s license and identification information
- bank and credit cards
- birth and marriage certificates
- pension information
- home and work addresses
- school records
- immigration and naturalization records
- family court records
- employment and employer records
- psychological and psychiatric health records
- hospitalization records
- addiction treatment records
- records for HIV/AIDS tests
The Social Security Administration also collects tax information, including total earnings, Social Security and Medicare wages and annual employee withholdings.
DOGE has not only accessed the agency’s sensitive and protected information; it has also publicly shared it, according to the complaint. The actions of the defendants, including the Social Security Administration, DOGE and leaders including former head Elon Musk, have deprived Americans of privacy protections guaranteed by federal law and made their personal information vulnerable, the complaint alleges.
In her dissent, Jackson, joined by Justice Sonia Sotomayor, notes that records show “DOGE received far broader data access” than the Social Security Administration usually allows in fraud, waste and abuse investigations. Typically, those investigations start with high level, anonymized data, with more access to more detailed information only granted as necessary.
Justice Elena Kagan also dissented in the 6-3 decision.
“The government wants to give DOGE unfettered access to this personal, non-anonymized information right now – before the courts have time to assess whether DOGE’s access is lawful,” Justice Jackson wrote.
While litigation is pending, the government has asked to temporarily suspend the lower court’s temporary limitations on DOGE’s access to Social Security data, she noted.
“But the government fails to substantiate its stay request by showing that it or the public will suffer irreparable harm absent the court’s intervention,” Justice Jackson wrote.
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