• Euro bullish sentiments are abound as the continent appears to be on track to fend off a recession in 2023.
• Currency experts maintain that this trend could spell positive news for the euro.
• Standard Chartered’s Steve Englander believes the euro should be stronger, as incoming data since the beginning of the year suggest.
The euro has been trading within a tight range of just over $1.07 since the beginning of 2023. Despite its relative slump against the US dollar in 2022, the common currency has managed to recover in recent months, sparking bullish sentiments among currency analysts and experts.
The euro’s weakness last year was mainly attributed to the US Federal Reserve’s aggressive monetary policy tightening. At the same time, the European Central Bank had run out of leeway to stimulate the economy further. With 2023 well underway, the markets head into uncertainty amid shifting economic data and fiscal policy.
However, currency experts remain optimistic that the euro could make a strong comeback this year. Steve Englander, head of global G-10 FX research at Standard Chartered, believes that the euro should be stronger, as incoming data since the beginning of the year suggest. He maintains: “The euro is trading within its late December range, but incoming data since the beginning of 2023 suggest to us that it should be stronger.”
The euro’s recovery could be further bolstered by the continent’s attempt to ward off a potential recession. With the effects of the pandemic still lingering, European countries have implemented a range of measures to stimulate the economy and mitigate the effects of the crisis. This could potentially help the euro to remain relatively stable in the coming months.
Nevertheless, it is important to keep in mind that the euro’s strength is subject to a range of factors, from global economic and geopolitical developments to monetary policies. As such, it is important to monitor the changing dynamics of the markets to gain a better understanding of the euro’s trajectory.