The euro may slump to parity with the dollar in the first half of this year if the European Central Bank expands monetary stimulus to include buying sovereign bonds under quantitative easing, according to Nomura Holdings Inc.
The 19-nation shared currency has dropped 2.6 percent since Dec. 31, extending six months of losses. It touched a nine-year low of $1.1753 today in trading in New York. “Reaching parity within six months I don’t think is out of the question at all,” Jens Nordvig, managing director of currency research at Nomura, said in an interview in New York yesterday. “That’s very possible.”
Nomura’s base-case forecast is for the euro to be at $1.20 by the end of the first quarter, drop in the second quarter to $1.15 and reach $1.12 by year-end. The prospect of quantitative easing, combined with money flowing out of Europe’s fixed-income markets as investors seek higher yields in other countries, may accelerate the euro’s decline, Nordvig said.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Latest posts by marketpulsefxstaff (see all)
- Oil Remains Near Multi-Month Lows - 6 August 2015
- U.S. Dollar Higher on Recent Data - 6 August 2015
- Greece’s PM Tsipras: Loan Deal with Lenders Close - 6 August 2015