The euro failed to hold gains and weakened toward $1.05 in the last week of June, close to a 5-year low of $1.04 hit in May as the gap between interest rates and growth in Europe and the US is widening. ECB President Lagarde said the central bank intends to raise policy rates by 25bps on July 21st, the first hike in 11 years and that the normalization path will go as far as necessary to ensure that inflation stabilizes at the 2% target over the medium term. She added the key interest rates are also expected to be raised again in September but did not provide the magnitude. Preliminary inflation prints for major Euro Area countries is due this week, with price growth across the 19 countries sharing the euro set to hit another record high. Meanwhile, the Federal Reserve raised the funds rate by 75bps in June, the most since 1994 and Chair Powell signaled a similar move could come at the next meeting making clear that the central bank is fully committed to fighting the surging inflation.
Historically, the Euro Dollar Exchange Rate - EUR/USD reached an all time high of 1.87 in July of 1973.The euro was only introduced as a currency on the first of January of 1999. However, synthetic historical prices going back much further can be modeled if we consider a weighted average of the previous currencies. Euro Dollar Exchange Rate - EUR/USD - data, forecasts, historical chart - was last updated on June of 2022.
The Euro Dollar Exchange Rate - EUR/USD is expected to trade at 1.04 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 1.01 in 12 months time.