We recently noticed that some third-party companies and individuals impersonated the TOPONE Markets brand and illegally misappropriated our trademarks.

We Hereby Reiterate Our Statement:

  • TOPONE Markets does not provide discretionary account operation trading services, nor does it cooperate with other third-party vendors and/ or agents to provide such services.
  • TOPONE Markets staff will not promise to our customer the definite profit, please do not trust any kind of the profit promise or profit related picture, such as screenshot/ chat history, etc, all investment profit can be only viewed on our official website and application.
  • TOPONE Markets is a professional online trading platform with low spreads and zero handling fees. Be wary of any behavior that asks you for any fees directly and privately. TOPONE Markets does not charge a fee at any stage of its trading process or other fee.

If you have any questions or concerns, please feel free to reach us by clicking the "Online Customer Support" or send an email to our customer care team cs@top1markets.com. We will answer your questions and assist you promptly.

Understood
We use cookies to learn more about how you use our website and what we can improve. Continue to use our website by clicking "Accept". Details
Market News Experts say the euro is unbelievably cheap, and it's time to buy

Experts say the euro is unbelievably cheap, and it's time to buy

Today, the euro is hovering just above $1.05 against the dollar, down from around $1.22 in June last year and on a steady decline for nearly a year. Sam Zief, global head of foreign exchange strategy at JPMorgan Private Bank, said on Wednesday that parity would require a downward revision of growth forecasts for the euro zone relative to the U.S., similar to what we saw after Russia’s invasion of Ukraine. "

2022-05-20
9382
The euro is near parity against the dollar for the first time in 20 years, but currency strategists are divided on whether the euro can reach parity and what that means for investors and the economy.

The euro is currently hovering around $1.05 against the dollar, down from around $1.22 in June last year, a steady decline for nearly a year. The euro fell to just over $1.03 earlier this week.

The dollar strengthened on the back of risk aversion as worries about Russia's war in Ukraine, soaring inflation, supply chain issues, slowing economic growth and tightening monetary policy drove investors into traditional safe-haven assets.

The narrowing of the gap between the two currencies was also driven by differences in monetary policy among central banks . The Fed raised its benchmark borrowing rate by half a percentage point earlier this month, its second hike in 2022, as it looks to rein in inflation at a 40-year high. Federal Reserve Chairman Jerome Powell said on Tuesday that the central bank will not hesitate to continue raising interest rates until inflation falls to a manageable level, and reiterated its commitment to bringing inflation closer to its 2 percent target.



In stark contrast to the Fed and the Bank of England, the European Central Bank has yet to raise rates, despite record inflation in the euro zone. However, it has signaled an end to the asset-buying program, and policymakers have taken a more hawkish tone recently.

Excessive weakness in the euro threatens price stability in the euro zone, increases the cost of dollar-denominated imports and commodities and further fuels prices that have pushed euro zone inflation to record highs, European Central Bank policymaker Francois Villeroy de Galhau said on Monday. pressure.

Sam Zief, global head of foreign exchange strategy at JPMorgan Private Bank, said on Wednesday that parity would require a downward revision of growth forecasts for the euro zone relative to the U.S. , similar to what we saw after Russia’s invasion of Ukraine.

"Is it possible? Of course, but it's certainly not our base case, and even then parity in the euro seems to be the worst-case scenario," he said, suggesting two to three years of risk-reward -- the ECB might avoid The opening of negative interest rate territory and the reduction of fixed income outflows from the euro zone means the euro looks incredibly cheap at the moment . "I don't think many clients will look back in two or three years and think buying the euro below $1.05 was a bad idea ," he said.

He noted that the Fed's aggressive rate hike cycle and quantitative tightening over the next two years have been priced into the dollar. Stephen Gallo, European head of FX strategy at BMO Capital Markets, agreed.

Gallo believes that it is not just the prospect of a major policy divergence between the Federal Reserve and the European Central Bank that will affect EUR/USD. "It's also the evolution of the euro's core balance of payments and the prospect of more negative energy supply shocks, which are also dragging the euro lower, " he said. "Based on the data we track, we're not seeing a significant increase in leveraged funds against the euro . Signs of dollar short positions lead us to believe the weakness in the euro is due to worsening underlying core flows .”

He said parity between the euro and the dollar would require the ECB to maintain policy inertia through the summer, with interest rates on hold, while Germany's blanket ban on fossil fuel imports from Russia would lead to energy rationing. "If the ECB faces a worst-case scenario of rising recession risks in Germany and a further sharp rise in prices (i.e. horrific economic stagnation), it should come as no surprise that ECB policy continues to be inert," he said.

"For the Fed, I believe the Fed will be alerted by the euro-dollar shift into the 0.98-1.02 range, and with this level of strength in the dollar against the euro, I could see euro-dollar moving into that range, causing the Fed to pause or slow," he said. its austerity actions."



EUR/USD daily chart
GMT+8 May 20 11:22 EUR/USD at 1.0559
Previous
Next

Bonus rebate to help investors grow in the trading world!

Need Assistance?

7×24 H

Download the APP for Free