The single currency gained 0.3 per cent in early trading in Europe to $1.0489. The currency briefly hit a high for the year during morning trading in Asia, rising as much as 0.7 per cent to $1.0528. “Obviously some relief is showing through in the euro now,” said Tony Sycamore, a market analyst at IG Australia.

"It is clear that this [the U.S.] government does not care much about the fate of Europe," says Friedrich Merz, who is set to be Germany's next chancellor.