The euro approached 1.0500 on Friday, close to its two-week high, as traders assessed President Trump's trade policy and the potential end to the war in Ukraine.

On February 13, Trump announced proposed reciprocal tariffs on a country-by-country basis, due to take effect as early as April, although investors remain hopeful that negotiations could prevent their implementation.

At the same time, optimism grew about a possible resolution to the Ukrainian conflict, with Trump pledging to accelerate peace efforts following talks with Russian President Putin and Ukrainian President Zelenskyy. US, Russian and Ukrainian officials are meeting at a security conference in Munich to continue discussions.

However, the divergence of monetary policies remains an obstacle for the euro, with the Federal Reserve remaining cautious about cutting rates against a backdrop of stronger-than-expected US inflation, while the European Central Bank is likely to continue easing rates, adding downward pressure to the currency.