The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookiesbefore using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.
FOREIGN EXCHANGE

FX: What now for the euro?

FX analysts have diverging views on the prospects for the euro over the coming months as bank research warns that the single European currency could soon be worth no more than the dollar.

euro-sculpture-600

In a research note published in May, JPMorgan suggested that EUR/USD would test parity in 2022 and said it saw little prospect of respite over the remainder of the year as the reality of more sustainable US Federal Reserve tightening hits home.

HSBC analysts expressed similar sentiments earlier in the month, suggesting that the euro has already faced more downward pressure than expected and that rate hikes may not be positive for it, which begged the question of whether the European Central Bank (ECB) might change its rates policy in response to the weakness of the single currency.

Thursday’s ECB meeting provided the answer to that, with the central bank announcing it would raise rates by 0.25% in July – the first such increase since 2011 – and would end net purchases under its asset purchase programme from July 1. The central bank also expects to raise rates further later in the year.

The euro had climbed to about 1.076 to the dollar ahead of the ECB announcement, but dropped sharply in its immediate aftermath, and was at about 1.066

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?