Fed’s Dovish Tilt to Unleash Tide of Bets on Resurgent Euro
- Citi sees euro reaching $1.25 to $1.275 by third-quarter end
- Vaccine rollout, economic recovery fueling currency’s rally
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Euro bulls are out in force this week, after Jerome Powell poured cold water on bets the Fed was poised to withdraw its aggressive support for the U.S. economy.
Creeping U.S. inflation won’t last and doesn’t justify higher interest rates, he said. That’s narrowed the gap between what investors can expect to earn in the U.S. over Europe, dashing the chances of a resurgent dollar and vindicating FX strategists who said the euro’s April rally has further to run.