Parity Beckons for the Euro Even With ECB Speeding Up Rate Hikes
- ‘ECB’s tightening cycle is so tiny compared with the Fed’
- The euro has hovered just above dollar parity all week
A currency exchange office in Istanbul, Turkey on July 20.
Photographer: Umit Turhan Coskun/NurPhoto/Getty Images
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The euro is heading back to dollar parity, and not even a faster pace of rate hikes by the European Central Bank can change that, according to traders and market strategists.
The big issue in Europe remains energy security and that’s why a move back to parity is more likely than a climb to $1.04, said Francesco Pesole, an FX strategist at ING. Plus, the interest-rate differential between Europe and the US still argues for weakness in the euro.