Euro May Decline to $1.15 in September, SocGen’s Juckes Says
The euro may fall to levels between $1.15 and $1.20 in September, according to Kit Juckes, head of foreign-exchange research at Societe Generale (GLE) SA.
The 17-nation currency rallied today after European Central Bank President Mario Draghi said policy makers will do whatever is needed to preserve the euro. Juckes said he expects the euro to trade at current levels through August before resuming declines.
“The central bank is doing everything it can, the challenge is with the politicians,” Juckes said in an interview on Bloomberg Television’s “Surveillance” with Tom Keene and Sara Eisen. “What we need to solve is the crisis of financing the banking system and the governments.”
The euro rose the most in almost a month, gaining as much as 1.3 percent to $1.23 at 9:13 a.m. in New York. The shared currency has fallen 5.1 percent this year against nine major counterparts, according to the Bloomberg Correlation-Weighted Indexes. The greenback has gained 0.7 percent this year.
Juckes said the European debt crisis still could “drag confidence down” and send the U.S. back into recession.
“Your economy is doing much better than our economy,” London-based Juckes said. “There’s nothing in the U.S. economy that says you need to have another recession. We’re the threat.”
The Federal Reserve will probably take more action this year to boost the U.S. economy, Juckes said, adding central bank beginning a third round of quantitative easing, known as QE3, is a “question of time.”
“The Fed only has so many bullets left, but it will use them,” he said.
To contact the reporter on this story: Lindsey Rupp in New York at firstname.lastname@example.org