Wall Street is abandoning bets on a stronger euro in favour of the dollar
Wall Street’s largest financial institutions, including JPMorgan, Morgan Stanley and BNY Mellon, are backing away from betting on a stronger euro.
This is according to Bloomberg.
The forecasts suggest the European currency could fall by more than 3 per cent to $1.10.
This trend is driven by market expectations of a faster pace of interest rate rises in the US compared with Europe by the end of 2026.
The shift in market sentiment comes against a backdrop of diverging central bank policies, the conflict in the Middle East and rising oil prices.
Fed Chair Kevin Worsh has signalled a hardline stance on tackling inflation, prompting investors to factor in further rate rises in the US.
Amid energy-related pressures, financial giants are lowering their consensus forecasts for the euro, reflecting the strengthening of the US dollar.
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