Euro Losing Some Appeal as Dollar Alternative

Dow Jones
09/22

1343 GMT - The euro's appeal as a dollar alternative might be beginning to fade somewhat after the Federal Reserve raised interest rates last week and ahead of next year's French elections, Barclays analysts say in a note. While eurozone growth remains resilient, expectations for further rate rises by the European Central Bank appear too aggressive versus fundamentals and against a backdrop of geopolitical and trade risks, they say. "Our updated forecasts pencil in a re-convergence of euro-dollar with rate differentials-implied levels over the next 12 months." The euro falls 0.1% to $1.1455 and Barclays expects it to reach $1.12 by the second quarter of 2027.

 

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