Euro dollar parity expectations for 2017


Market analysts expect the EURUSD to reach equality by the first quarter of 2017. What are your Euro dollar parity expectations?

16 December, AtoZForex The EUR might eventually reach parity with the US dollar, following the Federal Reserve’s (Fed) decision to raise the interest rates across the country.

Euro dollar parity expectations

Even though the move was widely expected by the markets, FOMC changed outlook regarding the pace of the interest rates relatively impacted the markets. Moreover, unexpectedly strong EUR came as a surprise for financial market participants. The common currency has initially depreciated in the wake of Italy referendum, later being supported by Fed decision on rates.

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The EUR was trading near $1.042 regions in late session on Thursday, after reaching its lowest level versus USD since 2003 at $1.0364. Yagub Rahimov, the Forex Academy Captain at AtoZForex, has shared his stance on the future of EURUSD:

“It seems like Euro is under attack from West (Brexit), South (Italian Financial and Political crisis) and East (Greece and Refugee crisis). At least Scandinavians are not very hostile. From the technical analysis point of view, I am still bearish on EURUSD until 1.0199 which falls onto 138.2%

True Fibonacci Wave retracement zone. From the time point of view this move should be achieved prior to the 18th of January. However from then onward I would expect the bulls to take EURUSD for a ride back towards 1.08 - 1.11 zone.”

Why did USD appreciate?

In the recent weeks, the dollar index has gained to historically high levels. Moreover, the US Treasury yields have advanced on optimistic expectations about the US economic growth. Donald Trump’s agenda in regards to the tax reforms and an increase in fiscal spending also plays in USD favor.

Euro dollar parity expectations for 2017

This tendency accelerates in the last two days, as Fed forecasted as much as three rate hikes in 2017. Following this news, the US dollar surged to its highest since December 2002.

In addition, strong USD weighs on the earnings of the US firms with operation abroad. Moreover, The greenback is also putting pressure on commodity prices and emerging markets.

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