Lost your password?
Don't have an account? Sign Up

Investors Bets on Euro Comeback!

Senior analysts think the euro will rebound this year!

That after a brutal 2022 that sent the common currency below parity with the U.S. dollar.

Tweet on Usd/EU chart

Tullet Prebon chart on eur/usd

The euro lost 5.9% last year as Europe battled an energy crisis and investors feared Russian moves to shut off gas supply would cast the continent into darkness and a deep recession this winter.

Those fears turned out to be too pessimistic: Mild weather and a push to secure other energy sources have helped stave off a more profound energy crunch.

Meanwhile, European economies have largely held up, as governments spent big to shield households and businesses from energy-price increases.

  • The currency was trading at $1.072 Tuesday.

Here’s why some analysts see it rising from here:

The Federal Reserve will likely hit the pause button on interest-rate increases before the European Central Bank does.

Markets expect the Fed to raise rates by another 0.50 percentage-point in the first half of this year, while the ECB is seen boosting borrowing costs by another one to 1.5 percentage point, according to Scotiabank.

Higher rates should attract foreign investors into eurozone bonds and support the euro.

Concerns over Europe’s energy security have faded. European Union countries have built up large stockpiles of natural gas



Source:WSJ/Tullet Prebon