In Q2 2021 the Euro has re-gained strength versus the greenback, a reverse on Q1 where the reflation trade — an increase in US interest rates — had pushed up the USD exchange rate against most currencies.
EUR/USD – Despite some heavy selling pressure, the Euro held a weekly low at 1.1754, settling at 1.1769 at the close on Friday. A week ago, EUR/USD finished at 1.1805. The overall firmer US Dollar and a dovish outcome from the ECB pressurised the shared currency. However speculative shorts on the bid provided strong support for the Euro.
The topside of the EUR/USD is now limited to 1.2000 and the risk is for a move to the next support at 1.1700. EUR Forecasts
Last week saw the US Dollar slowly but surely grind its way higher against all its Rivals. USD Forecasts
In May OFX see the euro could trading within a range of 1.17–1.22 USD against the US dollar, and against the pound between 0.8510–0.8735 GBP. Any positive news around the recent acceleration of vaccine roll-outs, lockdowns easing, or progress on the EU Recovery Fund could drive gains for the euro in the coming months.
Goldman Sachs see the EUR/USD rate hitting 1.25 (USD/EUR below 0.80) in the next 3 months, up from their previous prediction of 1.21 dollars to the euro.
ING see the ECB decision to lean against the rising bond yields as a positive for EUR/USD. They expect EUR/USD to move above 1.2500 this summer.
Other optimistic forecasters, believe the ECB’s support of the eurozone economy is working, they suggest a strong upside for the euro against the U.S. dollar this year and that EUR/USD will test new highs in 2021.
Whether the euro will rise or drop in the future against the US dollar is a difficult question and the answer really depends on many factors. The best way to consider the current USD-EUR relative value is to check the change in the exchange over a range of periods to the present day. The below table does this for periods going back 10 years.
23 Jul 2021→
|0.8% ▼||1 Week|
30 Jun 2021→
|0.1% ▼||30 Days|
01 May 2021→
|1.3% ▲||90 Days|
30 Jul 2020→
|0% ▲||1 Year|
31 Jul 2016→
|5.9% ▼||5 Years|
02 Aug 2011→
|19.7% ▲||10 Years|
USD/EUR rate change to 30-Jul-2021 → 0.8426
Disclaimer: Please note that the currency forecasts and opinions of our authors should not be taken as a reference to buy or sell any financial product.