Euro Forecast Higher into Year-end, but EU Council Meeting to Discuss Rescue Fund is a Key Stumbling Block

The Euro is being backed to advance against the U.S. Dollar through the second half of 2020 by a number of analysts citing the potential for Dollar underperformance in the second half of 2020 as a global economic recovery gains traction.

The Euro stalled in its advance on the Dollar Thursday after running into technical resistance on the charts and as stock market futures dipped lower across the Atlantic, although the single currency is being tipped for a return to June highs before the week is out. 

The Euro-to-Dollar exchange rate edged higher last week but is vulnerable to market disappointment over the EU recovery fund in the coming days and for this reason may even be given a wide berth by investors before Friday's meeting of finance ministers.

The Euro was trading lower against the Dollar Wednesday as price action took a cautious turn amid international condemnation of China's actions in Hong Kong but the but the downside may be limited because single currency holds an advantage over the Dollar in the race to economic recovery. 

The Euro rally has been restrained by a swelling second wave of coronavirus in the U.S. and a growing global pandemic but Europe's comparative success in containing the disease could make the Euro-to-Dollar rate a wild card in a world where investors are beginning to seek safety again. 

The Euro exchange rate complex pared its recent advance against the Dollar and other major currencies, including the British Pound, on news the U.S. administration was looking to levy fresh import duties on European Union goods.

The Euro-to-Dollar rate built on earlier gains Tuesday after IHS Markit surveys pointed to a strong rebound in manufacturing and services activity for the month of June, although economists have urged caution, warning that the results give a misleading impression of conditions in the Eurozone economy. 

The Euro retreated further from three-month highs last week as it undeperformed and the greenback steadied amid a risk-averse shift in financial markets that could weigh further on the single currency in the coming days.