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The Euro to US Dollar exchange rate is likely to continuing rising but it may struggle above 1.20 due to the probable intervention of the European Central Bank (ECB), according to analysis from Commerzbank.
The Euro to US Dollar pair appears to have peaked and potentially rolled over after strong employment data in the previous week showed strong job gains in July.
The Dollar is at risk of weakening during the late summer as US political and geopolitical risks ratchet up, says Bank of America’s FX strategist David Woo.
The Euro appears to be strengthening against its major counterparts after the release of ZEW economic sentiment data, despite the gauge showing a modest fall compared to analysts’ expectations and the previous month’s result.
The Dollar is likely to lose ground over the medium-term after the other main G10 central banks rotate their policy stance and became more hawkish, according to analysis by IB TD Securities.
The Dollar Index, a composite of the Dollar versus a basket of currencies, traded higher, and then lower following the release of the Federal Open Market Committee (FOMC) meeting minutes on Wednesday, due to the central bank's mixed messages.
The Euro is expected to continue to appreciate versus the Dollar now that political fears about the integrity of the Eurozone have eased, say Deutsche Bank, who have put out a call for EUR/USD to reach 1.1600.
The Euro to US Dollar pair has risen strongly over recent weeks as the outlook for the Eurozone economy, its political institutions and the rhetoric of the European Central Bank (ECB), have all improved.