According to the BBVA Research Department, the US dollar no longer reacts so positively to strong US data.Over the long term, they see the EUR/USD it is appreciated very gradually, reaching the 1.25 zone in 2022.
Key statements:
“The tables have recently turned for the common European currency as it once again moves towards appreciation. After the period of weakness experienced at the beginning of this year, the euro has appreciated more than 3.5% so far this quarter, surpassing 1.22. This appreciation came earlier than expected. “
“Investors are turning to European asset markets as confidence in a recovery in the euro zone is intensifying. On the other hand, the strength of the dollar during the first quarter of this year seems to be disappearing and the currency no longer reacts so positively to the strong data from the United States.
“Once the end of the COVID-19 crisis approaches and the recovery is underway, the key will be its consolidation and the way in which the two large central banks, the Federal Reserve (Fed) and the European Central Bank ( ECB), begin to reverse their expansionary policies, as well as the moment when they begin to reduce asset purchases ”.
“In 2022, we expect the euro to continue to appreciate very gradually relative to the dollar towards long-term equilibrium levels, which could be around 1.25.”
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
