The EURUSD exchange rate has started the year at 1.0350, with traders talking of Euro v Dollar parity.
EURUSD – Daily Chart
The price of the EUR v USD has found resistance at 1.06 and at the 2023 lows near 1.045. The path ahead may now be clear to 1.
Europe is a region that is more vulnerable to US President-elect Donald Trump’s plan to increase tariffs on the country’s imports. The US is a big buyer of EU exports, such as cars, chemicals and luxury goods.
Europe’s economy has been struggling with recession in Germany and growth near zero in other countries. That has piled pressure on the single currency and is close to costing the job of Germany’s Chancellor and France’s President.
Euro weakness has aligned with strength for the US dollar globally. Demand has grown on expectations of economic strength under Donald Trump. Investors are hoping that the incoming President can resolve the country’s spending problems.
Following the election, at least 10 large banks are expecting a weaker euro, with some even predicting a move below the 1 threshold in 2025. The expectation for parity is not unanimous as some analysts believe the speed at which Trump’s policy proposals might be implemented may be slower. The country faces an important speaker vote on Friday and there has been some infighting among Republicans over spending cuts planned under Trump.
