Euro Forecasts for 2020

After several months of strength the Euro weakened in early September briefly after it touched $US1.20.

The trigger for the pull-back were worries in the market that the EUR rise had come too fast and strong for the ECB’s liking.

Still Credit Agricole see the Euro hitting US1.20 by the end of 2020 due to a growing diversification away from the greenback and more positive news out of Europe.

On Brexit, Nordea Research has said that “no deal” will have the euro buying £0.95, that a Norway-type Brexit (“Norway plus”) or permanent customs union will lead to £0.81-0.83, and a deal akin to the current withdrawal agreement should see £0.83-0.84.

EUR/AUD could be a lot higher by year-end, at rates between A$1.67 and A$1.785, based on implied forecasts from Danske Bank and Westpac.

September was a relatively quiet month for the euro, which it is not as vulnerable as commodity currencies when sentiment shifts from risk-on to risk-off. However, the euro did see losses against the USD and JPY which fell 2.28% and 2.63% respectively, due to the risk-off environment driving safe-haven demand in those currencies. Trade negotiations will continue to weigh on both the pound and euro until an agreement is reached. Both parties agree the deal needs to be made in October. Watch for the ECB announcement on interest rates and monetary policy on October 29 which could trigger volatility. October Currency Update

EUR in the markets

What is a good Euro exchange rate?

This is a difficult question and the answer really depends on many factors. The best way to consider an exchange rate’s current relative value is to look at the euro’s history against a range of currencies and in particular against the currency you are interested in exchanging it with.

For example, the following tables look at the change in the EUR exchange rate to the present day for periods going back 10 years for popular EUR exchange rates.