EUR - Recent Performance
In mid-October, the euro was floating around 1.18 against the dollar, having pulled back from September’s long-term highs close to 1.21.
Against the British pound, the euro stood at 0.897. It had been as high as 0.9306 in August – a level that hadn’t been achieved since 2009.
Speculation surrounding the end of the ECB’s quantitative easing program has driven euro appreciation this year. For the first time since its introduction, the central bank will discuss tapering QE at its meeting on October 26th.
In September, Dutch bank ABN Amro predicted EUR/USD would rise to 1.3 by the end of 2018. As reasons for the pair’s climb, ABN cited “strong conviction” on future US dollar weakness and less stimulative ECB policy.
In September, HSBC cancelled its forecast for the euro to rise to parity with the pound. HSBC’s revised year-end forecast now places EUR/GBP at 0.893.
A divergence in the paths of monetary policy between the ECB and the Swiss National Bank will lead to EUR/CHF climbing to 1.18 in the medium term, from October's rate of 1.154, according to a prediction by Credit Agricole.
Bank of America Merrill Lynch go one further on EUR/CHF. The bank has a “minimum target” of 1.20 by the end of 2018. BAML says that EUR/CHF “looks cheap relative to its longer-term moving averages.”