He euro He is aimed at specifying his Better streak against the dollar In more than 20 years, and, according to the options market, the rebound would continue for a while. One of the main uprisers would be the Difference of monetary policies.
This Tuesday, the currency grew 0.4% to touching the U $ S1,183he higher level since September 2021. In this way, it accumulates an increase of 14% since January. Then, the progress was slightly moderated up to US $177.
In this context, Option traders expanded their bullish bets. The so -called “risk reversions”, a key metric for the feeling of the market, experienced one of the biggest increases of the last week.
According to the data collected by Depository Trust & Clearing Corporation, almost 66% of the period options indicated expectations of a more robust euro.
The euro rises in front of the dollar due to rates differences
The euro gained ground mainly by the persistent weakness of the dollarpromoted by faster economic data in the United States and the growing expectation that the Federal Reserve (FED) will adopt more aggressive rates cuts than the European Central Bank (ECB).
This perception led markets to provide some 125 basic reduction points by the Fed compared to only 25 of the ECB.
Meanwhile, the latest inflation in the Eurozone does not offer forceful signals for an immediate change of ECB posture. Although there were slight price increases in countries such as France and Spain, in Germany inflation surprised downward, which reinforces the confidence that the 2% goal is on its way.
For analysts of Danske Bankthe fall of the dollar reflects a structural change, with less geopolitical pressure and a renewed focus on American economic and political challenges.
A bullish future for the euro
Consequently, analysts predict that the euro will reach the U $ S1,20 in the coming months. And from Société Générale to visualize the currency near US $1,25 in the medium term.
“While a slight strengthening of the currency does not represent a particular concern for the ECB, too fast profits tend to harden financial conditions and can threaten to stop economic growth,” he said Come RamMacroestratega in Bloomberg.
For its part, Nicholas WallDirector of Global Currency Strategy at JP Morgan Asset Management, said the European Central Bank (ECB) is doing everything right so that the euro is increasingly adopted as a reserve currency.
“A stronger euro benefits Europe, partly in the context of the increase in oil prices,” he said.
Source: Ambito
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