The euro climbed to its highest level in two years against the US dollar on Monday, fueled by growing expectations that the European Central Bank (ECB) will raise interest rates. This anticipation has boosted the euro’s appeal to investors.

Analysts suggest that the widening interest rate differential between the Eurozone and the United States is a key factor driving the euro’s strength. With the US Federal Reserve nearing the end of its rate-hiking cycle, the prospect of higher rates in Europe makes euro-denominated assets more attractive.

The euro’s rise could have implications for both European exporters and US importers. A stronger euro may make European goods more expensive for overseas buyers, while making imports into the Eurozone cheaper.