Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Author
hanan samim
Oct 03, 2023 2:08AM ET
I do image 1.02 down ward
0
0
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
Final hours: unlock premium data with Claim 60% OFF
Euro in selloff mode as experts warn road to parity against dollar coming soon
Published Oct 02, 2023 03:48PM ET
© Reuters.
Investing.com – The euro suffered a brutal September selloff that continued Monday following fresh signs of economic trouble in Europe just as experts warn that the single currency could hit parity with the dollar in the coming months as U.S. interest rates remain higher for longer.
EUR/USD fell 0.79% to $1.0487 after data showed Euro zone manufacturing activity remained in a deep contraction.
Eurodollar stumbles along road to parity
“We see a window for further dollar strength that could take EUR/USD back toward parity,” MUFG warned in its October outlook, released on Monday.
The last time the euro hit parity and fell below that level was in July last year, pressured by concerns of an energy supply crisis and economic woes.
While a stumbling euro economy, pressured by weakness in Germany, the economic engine of Europe, has returned to haunt the euro, the bulk of the weakness has dollar’s fingerprints all over it.
Dollar strength unlikely to fade as Treasury yields advance
The dollar index, which wrapped up its 11th straight weekly win last week, has jumped by more than 7% since its July trough, as the world’s reserve currency drew strength from the Federal Reserve’s higher for longer message that pushed Treasury yields to multi-decade highs.
“The risk for yields is to the upside given the time of year,” MUFG added. “With the potential for less liquidity ahead, we would not be shocked to see a break towards or above 5% on 10s.”
This window of dollar strength, MUFG says, could be reinforced should the Fed decide to hike rates in November.
The odds of a November rate hike haven garnered some attention recently -- after the U.S. narrowly avoided a government shutdown that would have likely dented near-term growth – moving to 30% from about 18% last week, according to Investing.com’s Fed Rate Monitor tool.
Euro bulls: Try again next year?
The months of selling in EUR/USD has forced the currency pair to give up all its gains for the year, though the end of the year or early next year could bring some hope or respite as higher rates are expected to make a larger dent in U.S. economic growth.
“As the data turns weaker in the US and the EUR/USD rate can partially retrace declines over recent months,” MUFG added.
US growth receding and Europe finding a trough in the next few months, along "with a continued deceleration in inflation pressures ... would help alleviate the key pressures that have kept the dollar elevated for much of this year," Goldman Sachs said.
Related Articles
Comments (5)
Don Burris
Oct 02, 2023 6:50PM ET
All currencies stink. Precious metals will find their way once people realize central bank are clueless.
0
1
Rajesh Kumar
Oct 02, 2023 6:50PM ET
Gold is going down for 8 consecutive days. Even precious metals are not a safe investment.
0
0
True Stamp
Oct 02, 2023 6:09PM ET
Time to leave the dollar system.
4
3
Phil Davis
Oct 02, 2023 6:09PM ET
Did you not read the dollar is going up? So you would rather be in the EURO of JA? What system will you switch to, they are suffering against the dollar.
0
0
Elvis Durant
Oct 02, 2023 5:09PM ET
Euro in sell off mode because USD got their @$$ kicked at Ryder Cup???
0
0
Jlaal Jlaal
Oct 02, 2023 4:18PM ET
fggg
0
1
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.