Currency Markets: A decline in the Euro to parity with the Dollar beckons
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Despite the euro zone having lower official interest rates and a notably softer economy than the US, the euro has held up remarkably well against the dollar. The exchange rate's volatility is the lowest it's been since November 2021. The US position looks superior in terms of relative central bank interest rates and growth outlooks. Bank of New York Mellon Corp.'s proprietary iFlow system tracks its global custody client holdings, which are worth $46 trillion. On balance, clients remain overweight in euros. The relative economic outlooks for the US and euro zone are markedly different, with the euro zone's future remaining bleak. The European Central Bank is making loud noises about cutting its deposit rate in June. A weaker common currency appears to be the course of least resistance for the foreign exchange market. The ECB governing council may well be content to watch it gently weaken. Marcus Ashworth is a Bloomberg Opinion columnist covering European markets.
Currency Markets: A decline in the Euro to parity with the Dollar beckons — TradingView News