The euro’s biggest rally since 2017 has further to run, Wall Street banks are predicting, as a broad shift by global investors to hedge their US dollar exposure suggests the single currency will soon be driven above $1.20.
The euro has strengthened more than 12 per cent against the greenback already this year, as a mixture of renewed optimism about Eurozone growth and fears over US President Donald Trump’s agenda has created what European Central Bank chief Christine Lagarde called a “global euro moment”. It hit a four-year high above $1.19 earlier this month.
Big investment banks, including Goldman Sachs, JPMorgan and UBS, think the euro, which has since fallen back a little to $1.17, will cross the $1.20 threshold in the coming months as the US Federal Reserve continues to cut interest rates, reducing some of the benefit from holding dollar assets.