The euro has experienced a decline following a Financial Times report suggesting that Christine Lagarde may leave her position at the European Central Bank (ECB) earlier than expected, potentially before the French elections scheduled for April 2027. The report indicated that Lagarde’s early departure could provide an opportunity for French President Emmanuel Macron to have input on her successor. In contrast, the U.S. dollar has been gaining strength, bolstered by recent economic data that showed a 0.6% increase in capital goods orders, excluding aircraft, in December.

Additionally, manufacturing output in the U.S. saw a 0.6% increase in January, marking the largest growth since February of the previous year, according to the Federal Reserve. This positive economic outlook contributed to a 0.46% increase in the dollar index, now standing at 97.56 points. The euro fell by 0.44% against the dollar, now at 1.1802, as the dollar recorded gains for the third consecutive session, achieving its most significant daily rise since February 5.

These movements in currency value reflect broader economic trends and uncertainties in the Eurozone, particularly concerning leadership transitions at the ECB. Lagarde's potential exit could have implications for monetary policy in the EU, signaling shifts that investors are closely monitoring amid global economic developments. The strengthening dollar juxtaposed with a weaker euro indicates a changing dynamic in international currency markets, influenced by both economic performance and political factors.