Euro to Rise vs. U.S. Dollar Short-Term but Outlook Uncertain from October: Nordea

The Euro will probably rise against the U.S. Dollar in Q3 but its rise will be short-lived and it could fall towards year-end and into 2020 say analysts at Nordea Bank.

The Euro was on its back foot Thursday after Bloomberg News reported the European Central Bank (ECB) has come to view its inflation target as too "rigid" and that discussions about altering it are underway, which could ultimately see Eurozone interest rates move lower for even longer than previously thought. 

The Euro stabilised at the bottom of its recent trading range Wednesday but the threat of a break to the downside has grown this month, according to technical strategists at J.P. Morgan, and BMO Capital Markets has warned that central bank decisions at the end of July could result in fireworks.

The Euro was treading water early in the new week as a resilient Dollar guards the path ahead of the single currency, which is likely to remain the case in the months ahead according to analysts at Rabobank and ING Group, who say any recovery is likely to be a very slow burn for Europe's unified unit.  

Euro-to-Dollar exchange rate 5-day forecast suggests the single-currency is, on balance, preferred over the Dollar.

The Euro advanced against a retreating Dollar Thursday after European Central Bank (ECB) board member Benoit Coeure downplayed a recent increase in market fears over the outlook for the Eurozone economy, private sector forecasters are increasingly warning of trouble ahead. 

The Euro softened Wednesday and is set to go on declining into year-end, according to forecasts from Barclays, which were downgraded this week in response to an improving outlook for the U.S. economy. 

The Euro-to-Dollar rate is trading around 1.1224 at the start of the new trading week, after falling 1.25% from the week before. Studies of the charts suggest the exchange rate may now be poised to fall even further over the coming 5 days.