At the beginning of the week, the euro passed the $ 1.20 mark again. Or rather, the dollar has come under pressure. Analysts assume that the appreciation will soon reverse.
Dhe euro continued its latest appreciation trend on Tuesday. However, the common currency was unable to maintain the peak value of temporarily $ 1.2080. Nevertheless, since the beginning of the month it has appreciated by almost 3 percent against the “greenback”. The recent strength of the euro, on the other hand, is largely a weakness of the dollar. In the wake of the presidential elections, this had now recovered from the year-on-year downward trend. But now the dollar index, which indicates the value of the American currency against the world’s most important currencies, has fallen again to 91.06 points, which is well below the 50-year average of 96.8 points.
Analysts attribute the most recent development to the narrowing of the gap between long-term American and European returns. The yield gap compared to ten-year Bunds had risen from 1.5 percentage points to 2 percentage points this year by the end of March and has since fallen back to 1.8 percentage points. The background is the perception of the markets that the recovery from the consequences of the corona pandemic in America could be less spectacular and more powerful in Europe than originally expected. This could also make the difference in inflation rates and key interest rates less clear.
The majority of analysts assume that the euro exchange rate will fall below the $ 1.20 mark again. On the one hand, they are more pessimistic about developments in the euro area. Second, there is strong technical resistance at $ 1.2060. It is therefore a bad sign that the euro fell below these levels, especially with the start of American trading, even if it has recovered from its daily low of $ 1.2026.