bolgia10

Euro-Dollar, Goodbye Parity?

FX_IDC:EURUSD   EURO / US DOLLAR
Any thoughts?

"Dollar Will Rise to Parity With Euro             , Principal Global Says"

"The dollar is poised to strengthen to parity with the euro             in the next 12 months as the Federal Reserve is still on course to raise interest rates, even after deciding not to act this week, according to Principal Global Investors."

"Analysts predict the dollar will appreciate to $1.05 per euro             and 127 yen by the end of September 2016, according to the median estimates of surveys compiled by Bloomberg."

http://www.bloomberg.com/news/articles/2015-09-18/dollar-will-advance-to-parity-with-euro-principal-global-says
timwest PRO
a year ago
The Data before the EURO existed is created with data meshed together. Fascinating trendline that the EURUSD retested here on this last decline. I guess I could see sideways chop to confuse the bulls and the bears. The bears are certainly more vocal, as you've noted the various forecasts for lower prices by Principal Global and Bloomberg surveys. I don't think the European economic recovery is going to be any stronger than the US recovery, so I will vote SIDEWAYS for a year.
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ElGato PRO
a year ago
Nice chart!
Since you go that far back in time, it's possible that the data is a bit thwarted, as Tim suggests. I think it's historical data from the Deutsche Mark.
If it is a true trendline however, and we take logarithmic into consideration, we already dropped below the trend and the Euro seems to be hanging on to that line with just the fingertips and nails.
snapshot
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bolgia10
a year ago
Good comments, guys, thanks. I think the historical pre-99 euro is constructed using the GDP weights of the relevant EU countries compared to the US.

The interesting bit for me, though, is the real euro bit of the trendline, 2000-2015. The left end touch is October 2000 on dollar strength. 15 years later, in early March this year, when all the analysts were cheering Parity! Parity!, eurodollar bounced right off that trendline March 13-20 on weaker-than-expected US data and a Fed hold. And off we've gone ever since.

This precision seems to speak in favor of the non-logarithmic chart, and that the chances of parity are over, potentially "forever" :)

It'll sure be interesting to see what happens if the chart does hit the trendline again anytime soon.
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ElGato PRO bolgia10
a year ago
Interesting observations indeed.
I'm not a believer in parity myself, but it's gonna be interesting to see how this develops for sure.
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