For more than two years, the single European currency shows a decline in relation to the US currency, so for 2015 it decreased by 10.2%, in 2016 - by 3.2%. Note that the end of last year was particularly difficult for the currency amid growing geopolitical risks in Europe and the US election victory of Donald Trump.
By the beginning of 2017 investors gather up a lot of questions about the future of the European currency, which they viewed through the prism of the election - in the Netherlands, France and Germany. Clouds over the single currency deepened when the option was winning the Dutch Parliament European opponents of globalization, as well as the likely victory in the presidential election Malin Le Pen, who was similarly configured. But this time everything went and came to power, the desired policy for the European community, which led to the strengthening of the euro against the US dollar.
Recall, "People's Party for Freedom and Democracy" in the Netherlands has received 33 seats in the parliament out of 150, and the French president was Emmanuel Macron, who advocated the strengthening of the EU.
It is also beneficial to the value of the euro and the actions of the President of the USA, namely, that he was unable to fulfill its promises and failed to make health care reform, which were big bets.
It is impossible not to note the release of positive macroeconomic statistics in the region. So, the euro area GDP in the first quarter, according to preliminary data increased by 1.7%. In addition, there is improvement in the economies of Germany, France and Italy. But the US GDP is poor, so the GDP reached only 0.7% in the first quarter of 2017, which is three times less than in the previous quarter, which is the weakest index in nearly 3 years.
Among the negative factors for the European economy can be called the UK out of the EU and the likely composition of trade disputes with the United States.
It should be noted that the strengthening of the euro at the beginning of the year contributed to the mitigation of the US Federal Reserve rhetoric about raising the key rate with a view to the possibility to reduce the balance of mortgage-backed securities by the end of the year.
That is, at this point all the factors point to the possibility of the European currency rise, but the tightening of US monetary policy the Fed could put growth in jeopardy, but again, Fed officials at recent meetings reported a probable reduction of the speed increase the key rate to reduce the assets to balance sheet.
Yesterday's speech by ECB President Draghi, as well as the possibility of holding early elections in Italy weighed on the euro. Recently, the euro / dollar was trading down 0.22% at 1.1138.
In the long term, until the end of 2017, analysts predict the medium-term rate of EUR / USD at 1.15 currency pair.
Based on materials WELTRADE
