The euro is currently supported between 0.96 and 0.97 US dollars per unit. Citi foreign exchange strategists believe that the euro may reach a low of $0.86 to the greenback. While the dollar slumped on October 13, the fiat currency is rising again and market strategists from Citi argue that the U.S. dollar “has likely not peaked yet.”
Citi Market Analysts suggest that Euro could be tapped at $0.93 — Financial Institution’s FX Strategists Say EU’s Currency May Slip to $0.86 if Economy Continues to Sour
Recent times have seen the official fiat currency, the euro (EUR), of 19 member states in the European Union (EU) has suffered a decline against the U.S. Dollar (USD). The euro’s annual loss against the greenback is 14.53%. In six months, however, it has been down 10.09%. While the 10% shave hurts, the percentage loss is less severe than fiat currencies like the Japanese yen (down 14.99% in six months), the U.K.’s pound sterling (down 14.46% in six months), and the Australian dollar (down 16.19% in six months).
The euro gained 0.11% in the US against the USD over the past five trading days. As FX Market Charts show resistance at $0.9818 and $0.9844, the fiat currency found support in between $0.9676 and $0.9721. Following a quick slide Thursday, October 13th, the U.S. Dollar Index, DXY, is currently hovering just above the 113.000 level. According to Reuters, Citi’s market strategists anticipate the U.S. dollars to increase in the future.
Reuters’ contributor Senad Karaahmetovic’s report details that Citi’s strategists insist that the greenback “has likely not peaked yet,” and the analysts envision EUR/USD dropping to 0.93 nominal U.S. dollars. However, Karaahmetovic’s report says the bank’s “FX strategists argue that the major could eventually hit 0.86 if macro headwinds increase.” Europe has been dealing with an energy crisis and the economic and monetary union has suffered from structural dysfunctions tethered to the Ukraine-Russia war.
Europe has struggled with high levels of inflation and significant amounts of debt. It has been said that the European Union and many other governments “should default on their debt.” On Thursday, Reuters’ contributor Balazs Koranyi wrote that “four sources close to the discussion said” that the European Central Bank (ECB) estimates that fewer rate hikes are needed to curb Europe’s inflation. On October 27, the ECB will meet. Markets are expecting the central bank’s benchmark rate to rise by 75 basis points (bps) at the meeting.
On Friday, the news agency Agence France-Presse (AFP) reported that two senior ECB officials say “uncertainty about Russian energy imports is pushing the eurozone closer towards a contraction in 2023.”
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