Euro-U.S. Dollar Exchange (EUR/USD)

The Euro-U.S. dollar exchange (EUR/USD), the world’s most liquid foreign exchange pair, has surged 12.88% in the first half, outperforming the Nasdaq and S&P 500, and nearly rivaling Bitcoin.

Bitcoin is currently valued at $107,416.55, reflecting a 14.8% rise, according to TradingView.

The strength of the euro has increased the appeal of stablecoins that are pegged to the euro. The cumulative market cap of 21 euro-pegged stablecoins tracked by CoinGecko has risen 44% from $310 million to $480 million. Leading this growth is the U.S.-listed Circle’s EURC stablecoin, whose market cap has ballooned by 138% to $200.36 million.

Legendary, the pseudonymous host of The Modern Market Show, revealed on X, “One of my bets trades this year was to move my entire stablecoin stack from USDC/USDT into a Euro-denominated stablecoin like EURC. Up 13% in dollar value in less than 5 months.”

Despite the rising demand for euro-pegged stablecoins, their total market cap is still less than 1% of the combined value of dollar-pegged stablecoins, which stands at $254.88 billion.

The EUR/USD valuation has increased from 1.0354 to nearly 1.17, achieving its highest point since September 2021. This upward trend is marked by a breakdown in the correlation between the exchange rate and the differential between Fed and ECB interest rates, alongside a general shift away from the U.S. dollar.

Additionally, the 90-day correlation coefficient between EUR/USD and Bitcoin has recently surged to 0.62, the highest since February 2024, indicating a moderate positive correlation between the two.