The euro continues to show weakness in its battle against the dollar, with a tepid fall of around 0.3% on Wednesday that left the continental currency at levels not seen since April, at the level of $1.068.
So far this year, the European currency has lost just over 3% against the American currency. And, with interest rates at their highest levels for several decades in both Europe, the United Kingdom and the United States, being the main reference currency is entering the competition. Pedro del Pozo, director of Financial Investments at Mutualidad, explains in this sense that, facing the second half of the year, the euro/dollar will remain as it has been until now as long as the US continues without lowering its inflation rates. “Of course, once the situation normalizes, we could have a medium-term eurodollar relationship back to areas that we have not seen for a long time,” explains the expert.
Therefore, and with an eye on the presidential elections in November, del Pozo advances, “we will have to be attentive to a North American CPI much higher than the European one. A situation that, if it continues like this, could drive a rate cut in Europe while inflation in the US can slow down that process.”
“In the short term, the perspective is that it will continue to remain in this price range, particularly in the low zone as long as inflation in the US continues to be higher than in Europe. Once the monetary normalization process advances, the relationship between both currencies should return more towards the high side, even in the medium term to areas that we have not seen for a long time as a relationship of 1.15 dollars in the reference between the euro and the dollar“, concludes the expert.
Regarding the exchange of the euro with other main currencies such as the pound or the yen, it loses 2.5% against the British currency and gains more than 10% against the yen, which is at the level of 171.6 yen.
