The common European currency will fall to 1.02 against the greenback by the end of the year, marking a depreciation of about 7% from current levels, David Adams, head of Group 10 foreign exchange strategy at Morgan Stanley, said in an interview reported by Bloomberg.
The forecast comes amid expectations that the European Central Bank (ECB) will continue to cut interest rates at its next three meetings, with the possibility of a significant half-point rate cut, the strategist said.
Illustration: According to RT.
“There is plenty of room for the market to refocus on the fact that the ECB could cut deeper and faster than the current rate. This week’s meeting could prove to be an important catalyst for the market to start thinking about that,” he added.
His forecast was said to be the most pessimistic among currency analysts polled by the news agency, with the consensus predicting that the common currency will actually rise to $1.11 by the end of 2024.
The eurozone economy grew at a slower pace than initially estimated in the second quarter, new data showed, suggesting the European Central Bank (ECB) will have a tough time soft-landing the economy in its fight against inflation.
Last week, the European Union's (EU) statistics agency Eurostats said that the gross domestic product (GDP) of the 20 eurozone member economies increased by 0.2% in the second quarter compared to the first quarter, instead of increasing by 0.3% as first announced.
With such an increase, the eurozone economy slowed down compared to the first quarter and grew much weaker than the growth of the US and UK economies in the same period.
The revised figures also showed a sharp fall in investment in the region in the second quarter and a drop in consumption - signs that higher interest rates are hurting demand. Exports and government spending were the two main growth drivers of the eurozone economy in the reporting period.
An Nhien (According to RT)
Source: https://www.congluan.vn/morgan-stanley-du-doan-dong-euro-se-giam-manh-post311912.html
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