Wall Street analysts expect the euro to rally against the dollar due to warm weather

In July last year, the European currency fell below the dollar for the first time in 20 years. JPMorgan is confident that the ECB’s aggressive stance will support the European currency

Strategists at Deutsche Bank and Morgan Stanley believe the euro could rise against the backdrop of milder weather in the eurozone. Experts of these banks predict that the euro will rise to $1.15, and analysts of the Japanese financial holding Nomura International – up to $1.1 by the end of January, writes Bloomberg.

“We have a wonderful time. This is a very reliable airbag that will help the eurozone get through
recession
,” TD Securities currency strategist Mark McCormick said in an interview. Bloomberg TV.

Gareth Gettinbeam, portfolio manager at Aegon Asset Management, also noted that depreciation risks to the euro are reduced due to falling gas prices. In early November, the trading price of gas on the ICE Futures website fell below $700 per 1,000 cubic meters for the first time since September 2021. This happened against the backdrop of a warm winter in the region and large gas reserves in European storage facilities.

As he writes BloombergJPMorgan Chase strategists are still wary of economic recovery in the region, but are confident a more aggressive stance from the European Central Bank (ECB) will support the European currency. According to experts, the ECB will raise interest rates by around 150 basis points this year, while the US Federal Reserve is expected to raise interest rates by only 60 basis points.

In July last year, the euro for the first time in 20 years it got cheaper dollar. The weakening of the European currency was associated with fears of an economic recession amid uncertainty over the supply of energy resources from Russia, as well as against the backdrop of the Fed’s tight monetary policy due to inflation, which peaked in over 40 years .

The euro was put into circulation on January 1, 1999. At first it cost more than the dollar, for the first time the euro fell to parity with it in December 1999. Then there were periods
volatility
but after returning to parity in 2002, the euro started to rise again and maintained its superiority over the dollar until the summer of 2022.

A macroeconomic term for a significant decline in economic activity. The main indicator of a recession is the decline in GDP for two consecutive quarters.

Price change over a certain period of time. Financial indicator in financial risk management. It characterizes the trend of price volatility: a sharp decrease or increase leads to an increase in volatility.
Moreover