Barclays analysts have adjusted their view on the euro, citing shifting market dynamics. While concerns over U.S. tariffs have faded, focus has turned to economic growth, particularly after Germany’s announcement of a major fiscal stimulus package. This policy shift could provide some support for the European economy amid weaker data from the U.S.

Analysts noted that Europe’s recent developments have reduced the risk of the euro reaching parity with the dollar. Fiscal measures may help cushion potential tariff-related effects on exchange rates and economic stability. However, Barclays warned that the euro’s rally may be running out of momentum as market sentiment increasingly turns against the dollar.

Despite these changes, tariff risks remain a key factor. Barclays advised investors to consider short positions in the Chinese yuan (CNH) against the dollar, arguing that the yuan’s tariff risk is underpriced and that China faces additional economic challenges.