The euro’s latest rally feels like a mystery wrapped in market noise, but if i break it down, a few potential drivers emerge. The most obvious explanation? Short covering. Markets may be pricing out extreme tail risks following Germany’s election, even though the CDU is weakened and coalition talks are far from smooth sailing. Another theory is that flows into Eastern European assets on a perceived détente are filtering back into the euro. While geopolitical de-escalation could provide a short-term boost, it’s unlikely to be the kind of fundamental game-changer that drives a sustained rally.