USD Touches 12 Year Low EUR Parity Could Happen Soon

As the euro trades around a 12-year low against the dollar, analysts believe euro-dollar parity will be reached soon—and that the single currency could weaken even further.

It comes as the European Central Bank’s quantitative easing (QE) program to stimulate the euro zone’s lackluster economy got underway on Monday.

Expectations of the move – which will see euros flood the market — sent the currency below $1.1000 for the first time since September 2003 on Friday. The currency has since weakened further and in early morning trade Wednesday, the euro was stuck around $1.0692.

Now analysts are questioning how long it will take for the euro to reach parity with the dollar – and potentially fall below 1:1 against the greenback.

“I think we’re heading towards parity and that’s the logical conclusion of where we’re heading next,” David Zahn, head of European Fixed Income at Franklin Templeton, told CNBC Wednesday.

“Originally, I was thinking next year (we’d see parity), but at the rate we’re going it does seem like it could be much sooner than that.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza