Forecasts for the euro change all the time, affected by news events and relative sentiment towards the overall Eurozone economy. This continually updated article reviews EUR bank forecasts and popular cross-rate trends.
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
The euro is currently a more appealing investment than the US dollar as fiscal support and COVID-19 containment open the door to a faster paced recovery than what is likely in the US. With current USD weakness and strong long-term prospects for the European Union, there is speculation that the euro could be a contender as the world’s new reserve currency. In the short term the euro could be susceptible to swings, however in the longterm the euro has very good prospects. The currency is poised to move above 1.1850 and extend toward 1.20 in coming weeks.
In mid-July euro strengthened four-month highs (around 1.15 against the US dollar) as european leaders delivered a difficult agreement on a coronavirus rescue package to help member states manage the economic downturn.
The historic stimulus package will see the bloc issue 750 billion euros (US$860 billion) of joint debt and is seen by market commentators as positive for the euro.
The Euro spent 2019 on a downwards trajectory, starting the year with highs at US1.1550 but then slid all year until October where it bottomed out at US$1.09 on Oct 1, close to long-term lows. Since then it has climbed back over the 1 year average of US1.11 towards US1.20.
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.
|16 Oct 2020 : 1.1716||1.2% ▲||1 Week|
|23 Sep 2020 : 1.1657||1.7% ▲||30 Days|
|25 Jul 2020 : 1.1656||1.8% ▲||90 Days|
|24 Oct 2019 : 1.1104||6.8% ▲||1 Year|
|25 Oct 2015 : 1.1016||7.7% ▲||5 Years|
|26 Oct 2010 : 1.3869||14.5% ▼||10 Years|
EUR/USD 10 year historic rates & change to 23-Oct-2020 : 1.1860
|16 Oct 2020 : 0.9072||0.2% ▲||1 Week|
|23 Sep 2020 : 0.9168||0.8% ▼||30 Days|
|25 Jul 2020 : 0.9112||0.2% ▼||90 Days|
|24 Oct 2019 : 0.8649||5.1% ▲||1 Year|
|25 Oct 2015 : 0.7193||26.4% ▲||5 Years|
|26 Oct 2010 : 0.8745||4% ▲||10 Years|
EUR/GBP 10 year historic rates & change to 23-Oct-2020 : 0.9093
|16 Oct 2020 : 1.6546||0.4% ▲||1 Week|
|23 Sep 2020 : 1.6500||0.7% ▲||30 Days|
|25 Jul 2020 : 1.6405||1.3% ▲||90 Days|
|24 Oct 2019 : 1.6291||2% ▲||1 Year|
|25 Oct 2015 : 1.5261||8.9% ▲||5 Years|
|26 Oct 2010 : 1.4073||18% ▲||10 Years|
EUR/AUD 10 year historic rates & change to 23-Oct-2020 : 1.6613