Commerzbank AG raised its forecasts for the euro against the dollar through December 2013, saying the projected weakness in the 17-nation currency will come later than it previously forecast.
The European Central Bank’s “announcement of unlimited bond purchases has calmed the markets to a wider extent over the past few weeks than we had expected,” Frankfurt-based analysts Ulrich Leuchtmann and Ralph Solveen wrote in a note to clients. “The euro weakness which we are projecting is therefore likely to occur later.”
Commerzbank estimates the euro will rise to $1.30 by December this year, up from a previous forecast of $1.23, according to the note. The currency will trade at $1.23 by the end of 2013, from a previous estimate of $1.16, the report said.
The euro dropped 0.5 percent to $1.2885 at 12:03 p.m. London time after falling to $1.2865, the weakest level since Oct. 11. The common currency has weakened 0.6 percent this year.
ECB President Mario Draghi on Sept. 6 announced details of the central bank’s plan to purchase unlimited quantities of the government bonds of nations requesting aid to help contain the region’s debt crisis.
“Contrary to previous expectations we now foresee euro-dollar to move sideways until the spring,” Leuchtmann and Solveen wrote. “However we stick to our view of a notably weaker euro for the time after that.”