The euro fell in European trading on Tuesday against a basket of global currencies, resuming its losses after a brief pause yesterday against the US dollar and moving once again toward a two-week low, as traders continue to favor the greenback as the best available investment.

Investors are closely following the latest developments in peace talks underway in Geneva aimed at ending the war in Ukraine, with Kyiv maintaining its rejection of the plan proposed by US President Donald Trump, arguing that it leans heavily in Moscows favor. Meanwhile, Washington is pushing European governments to adopt the planor at least adjust it enough to make it acceptable to all sides.

Price Overview

EUR/USD fell 0.1% to 1.1512 dollars, down from an opening of 1.1521, after touching a high of 1.1530.

The euro ended Monday up about 0.1%, its first gain in seven sessions, rebounding from last weeks two-week low at 1.1491.

US Dollar

The dollar index rose 0.1% on Tuesday, resuming gains after a brief pause and moving once again near six-month highs, reflecting renewed strength in the US currency against major and minor peers.

This strength comes as investors continue buying the dollar as the most attractive asset available, despite recent cautious remarks from some Federal Reserve officials that boosted expectations of a December rate cut.

Peace Talks

Trump unveiled a joint peace proposal with Russia last week to end the war in Ukrainean initiative that triggered significant controversy, particularly from Kyiv and its European allies.

According to multiple media reports, the plan includes major concessions from Ukraine, such as implicit Russian recognition over annexed territories like Donbas, limits on Ukraines military capabilities, and excluding Kyiv from joining NATO.

Ukraine and several European leaders rejected the draft outright, calling it biased toward Russia and harmful to Ukrainian sovereignty. Washington is now engaged in expanded negotiations in Geneva with Ukraine and European partners to reshape the proposal into a more balanced format.

Trump expressed optimism on Monday, saying maybe something good will happen, hinting at a potential breakthrough. European Commission President Ursula von der Leyen also said there is good progress in the Geneva talks.

Views and Analysis

Chris Turner, head of FX strategy at ING, said markets have been here before, but noted that the prospect of a Ukraine peace deal is beginning to show up in FX trading. Turner added that lower energy prices would support the euro.

In September, Swedens SEB Bank said the euro could rise as much as 7.5% against the dollar if a credible peace agreement between Russia and Ukraine is reached.

SEB analysts said such a breakthrough would be a game-changer for European growth and inflation dynamics, boosting household purchasing power and reviving the manufacturing sector.

European Interest Rates

Market pricing for a 25-basis-point ECB rate cut in December remains around 25%.

Investors await further eurozone data on inflation, unemployment, and wages before repricing policy expectations.