The prospect of a U.S. rate rise is coming back into focus for forex markets, putting a fall in the euro to parity versus the dollar back on the cards, some analysts say.
Europe’s single currency is down almost 8 percent against the dollar so far this year, but has clawed back from 12-year lows hit in March to climb almost 7 percent to trade just shy of $1.12 on Wednesday.
Over recent weeks, the euro has been driven by ongoing wranglings between Greece and its creditors. Negotiations came to a head on Wednesday, as both sides struggled to agree on reforms needed to secure further aid from international creditors. Without a cash-for-reforms deal, Greece is expected to default on its debt, raising the risk of a hasty exit from the single-currency club.