Traders expect increased discrepancies in the dynamics of interest rates between Europe and the United States, which sets a clear vector for further weakening of the euro. Weak inflation figures recorded in Germany and France at the end of the week reinforced the view that the ECB will continue to ease its monetary policy. At the same time, the US Federal Reserve left interest rates at the same level and signaled a possible pause, which makes the dollar more attractive to investors. The main question is how much the euro can fall. Experts assume parity with the dollar in the coming months. The market expects three ECB rate cuts by the end of the year, with the probability of a fourth estimated at 30%. Additional pressure on the euro may be exerted by the introduction of US trade duties, which were previously mentioned by Donald Trump. Recent data show a decrease in inflation in Germany and stable performance in France against the background of stagnant economic growth in the eurozone. At the same time, steady growth in the United States increases the likelihood that the Fed will not ease policy. The euro, having previously reached $1.0178, temporarily recovered after the US waived tariffs, but by Friday it had fallen to $1.0365. Option traders remain pessimistic about the euro.
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