Trade war and ECB on hold: what to do with your cash in 2026

Since the beginning of 2026, French companies have been navigating a macroeconomic environment that has few historical precedents. The trade war between the United States and the European Union is intensifying, the US dollar has weakened to historically low levels against the euro, and the European Central Bank has kept its key interest rates unchanged at 2.00% since June 2025. The next monetary policy decision is expected on April 30, 2026.

In this context, one question is increasingly common in finance departments: how do you manage corporate treasury when everything changes at the same time?

What the trade war actually changes for European treasurers

The tariffs imposed by the Trump administration on European imports have redrawn the risk map for companies across the continent. Contrary to initial expectations, the euro has appreciated against the dollar, an unusual dynamic that is disrupting allocation strategies across portfolios.

Several concrete effects are already being felt:

• Dollar-denominated assets have lost value for European investors who were exposed to them.
• US Treasuries lost their safe-haven status during the turbulence of April 2025, with investors rotating toward European sovereign bonds, particularly the German Bund.
• Market volatility remains elevated, which reinforces the case for liquid, predictable treasury solutions close to home.

For a French SME or mid-sized company, this means one thing: now is not the time to expose corporate cash to complex instruments, distant markets, or foreign-currency-denominated assets.

The ECB on hold: a reality to factor in

At its March 19, 2026 meeting, the ECB's Governing Council decided to keep all three key interest rates unchanged. The deposit facility rate remains at 2.00%, the main refinancing rate at 2.15%, and the marginal lending rate at 2.40%.

This stability is not trivial. It reflects a fragile balance the ECB is carefully maintaining:

• Inflation in the euro area is stabilising around 2.6% in 2026, slightly above target, partly driven by geopolitical tensions in the Middle East and their knock-on effects on energy prices.
• European growth remains modest at 0.9% in 2026 according to ECB staff projections.
• The next policy decision is expected on April 30, 2026, just days away.

The practical implication for treasurers: European money market rates remain attractive in the short term. Every euro of corporate cash, properly allocated, continues to generate a real return, as long as the right instruments are used.

Three mistakes to avoid in this environment

Faced with this complexity, three common behaviours can prove costly for companies:

1. Leaving liquidity in a non-remunerated current account With inflation at 2.6%, every idle euro loses purchasing power in real time. This inaction is the most widespread mistake, and the most avoidable.

2. Rushing into dollar-denominated assets to "diversify" The weakening dollar and elevated volatility in US markets make this strategy particularly risky right now. Diversification should be managed carefully, with a clear preference for euro-area instruments.

3. Locking everything into inflexible term deposits Commercial and monetary uncertainty is still high. Sacrificing liquidity for a few extra basis points is not a strategy suited to the current environment.

What works in April 2026: a two-horizon approach

In this context, the most effective strategy for French companies remains a combined allocation, structured around two complementary time horizons.

Operational liquidity: availability first

For short-term reserves, those covering day-to-day needs and unexpected expenses, the priority is immediate availability with no added risk.

Solutions like Smart Overnight allow companies to allocate these reserves into daily money market instruments, anchored to ECB rates, while retaining full flexibility. In an uncertain environment, this instant liquidity is not a luxury: it is a condition for financial resilience.

Medium-term reserves: capturing European yield

For capital that is not immediately needed, over a horizon of several months, the euro area currently offers real opportunities.

With a strong euro and ECB rates still at 2.00%, strategies exposed to European corporate bonds such as the Amundi EUR High Yield Corporate Bond ESG ETF make it possible to target higher returns while integrating ESG criteria. In a context of moderate slowdown but still well-oriented credit spreads, this type of allocation benefits from the relative resilience of the European economy.

How Velesios makes this two-horizon strategy simple

Historically, setting up a two-horizon treasury allocation required complex processes: multiple banking relationships, high fees, and significant administrative overhead.

Velesios changes this. Through the platform:

• Account opening is done entirely online, for both companies and individuals
• Order execution and custody are handled by Interactive Brokers
• Orders are aggregated to minimise transaction costs
• A clear dashboard provides real-time visibility over liquidity and performance

In a few clicks, a company can align its treasury with the market realities of 2026, without traditional banking intermediaries and without unnecessary complexity.

Conclusion

The combination of trade war, a weakened dollar, and an ECB on pause creates an environment that clearly favours investors anchored in the euro area, capable of maintaining flexibility while generating returns.

For French companies, inaction remains the primary risk. Allocating cash intelligently, between available short-term liquidity and performing medium-term reserves, is no longer the preserve of large finance teams. It is accessible, and it is necessary.

Sources & references

• European Central Bank — Monetary policy decision, March 19, 2026: ecb.europa.eu
• Banque de France — ECB Economic Bulletin No. 2/2026: banque-france.fr
• Tax Foundation — Tariff Tracker 2026: taxfoundation.org
• ECB — Trade wars and central banks: lessons from 2025: ecb.europa.eu
• Euromoney — 2026 Economic Outlook: Impact on Treasury: euromoney.com
• BNP Paribas Markets 360 — 2026 Corporate Risk Management Outlook: globalmarkets.cib.bnpparibas