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Apr 26 - 06:55 AM

EUR/USD - COMMENT-Chance EUR/USD Drops Below Parity Greater Than During Euro Zone Crisis

By Jeremy Boulton  —  Apr 26 - 04:35 AM

There is a greater chance that EUR/USD drops below parity now than there was during the euro zone crisis.

Demand for dollars resulting from a significant tightening in U.S. monetary policy is likely to fuel a bigger drop than in 2015 when a bet on the end of the single currency led traders to a record short position and the pair fell to 1.0457. nL2N2WO0G6

This is in stark contrast to current betting, with traders gambling on a rise as they have been doing for much of the time that the pair has fallen since the Federal Reserve announced changes to monetary policy in June 2021.

An unexpected move is likely to far exceed an expected move that ran deeper than EUR/USD's current 2022 low at 1.0673 EBS.

In 2015 ECB polices were designed to save the euro.
Current policies are weighing upon it and there is a likelihood of greater divergence with the Federal Reserve not only set to raise rates in a big way but also reduce the balance sheet.
This could drive EUR/USD much lower.

For more click on FXBUZ

EURUSD Click here

Refinitiv IFR Research/Market Commentary


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