A short-term market optimism may have helped the euro break out of a falling against the dollar, but analysts say the rise of the Euro may not last long.
The Euro is trading around 1.105 against the dollar on Friday, after going through a week-long rise from its record low in late September.
Experts have attributed this to the market optimism brought on by the limited trade deal between the U.S. and China, and a better outlook for Brexit.
But, the trend may not last long. Senior Analyst at FXStreet, Joseph Trevisani, predicts that the Euro could weaken to the end of this year, targeting 1.07 against the dollar.
He said a trade deal with China would further strengthen the U.S. economy and hence, the dollar.
“The consumer has been spending,” Trevisani told NTD, “the U.S. is running about 2% on pretty much consumer spending alone. If you add business investment to that, you got a two and a half to 3% economy that will, I think, bring the dollar higher, especially against the Euro, where you don’t have that capacity for any improvement from this kind of trade deal.”
The Eurozone has been one of the biggest victims in the U.S.-China trade war. Germany, the strongest economy in the E.U., even neared a recession.
“When the world gets concerned about international economics,” he said, “about growth; about investment; it almost always brings the world’s investors and the world’s investment back to the United States. The dollar has a permanent, safe haven advantage for status.”
But that doesn’t mean the outlook for the Euro is all dark. In an earlier report by the Wall Street Journal, most currency strategists said they don’t think the exchange rate would reach $1 in the future.
