Forex EUR/USD. Euro/Dollar forecast for today, May 31, 2021
At the end of last week, the volatility of the Euro/Dollar pair increased sharply, but at the end of the trading session, the quotes remained at 1.2190.
The US currency strengthened slightly against other assets on the back of expectations of new financial flows next month. Traders are waiting for the presentation of the draft budget, which will reflect an increase in federal spending to $6 trillion in the coming fiscal year.
ING analysts believe that the downward trend of the dollar will continue. The European Central Bank may increase its emergency bond purchases at its next meeting in June. The decline in long-term European bond yields has somewhat dampened the single currency's recent rally against the Dollar, but the exchange rate is still supported by foreign investor demand for Euro zone stocks.
Data released on Friday showed an impressive 13.1% decline in personal income in the US in April. The core price index for personal consumption expenditures rose to its highest level since 1994. Wells Fargo analysts note that the 13.1% drop in revenue in April was entirely due to a pullback after a rise in March caused by government payouts. The increase in spending partly reflects high inflation. The personal consumption expenditure deflator, the Fed's preferred measure of inflation, rose 0.6% from March. While the recent rise in prices is undoubtedly linked to a rebound in the economy, it may prove to be long-lasting, and will undermine the potential purchasing power of consumers. The Fed has not yet responded to the growth of indicators, but if the trend continues, the regulator will make changes to its monetary policy.
EUR/USD Euro Dollar forecast for May 31, 2021
In the forecast, the Euro/Dollar exchange rate is expected to decline to the levels of 1.2170, 1.2150 and 1.2120.