the US Federal reserve has just implied that it may not be as aggressive increasing US dollar interest rates in the forth coming year, this means, potentially, the Euro may not deteriorate as fast.
more updates to come
Yes, I know what you are going to say, you’ve changed your mind and NOW you believe what the forecasters are saying.
Well, sort of. I think its worthwhile to assess what professional forecasters are saying, look through their reasons for saying it (avoiding “revert to mean” scenarios) and then figure out what my personal view is.
We have recently had a big collapse in the value of the Euro, and a similarly pronounced rise in the value of the USD. So what’s going to happen next?
The European Central Bank launched its quantitative easing program on Monday, last week. Yields fell to record lows across the region. Meanwhile, the Federal Reserve is expected to raise interest rates sooner than later – that’s increasing demand for the dollar. The Wall Street Journal’s Chiara Albanese tweeted this chart showing Wall Street’s forecasts for the currency pair over the next few years. Deutsche Bank is the most bearish – the bank forecasts that the euro could reach parity with the dollar, or $1, by the end of this year.
I think this scenario is more than likley