The exchange rate of the Euro-Dollar pair fell to the level of 1.1910.
The US currency is in demand again, as fears of the global spread of a new variant of the coronavirus increase financial flows to safe-haven assets. New restrictions have been introduced in the Asia-Pacific region, and the situation in Europe is no longer as optimistic as it was a few weeks ago, when the acceleration of the vaccination program promised a rapid economic recovery. In particular, the euro seems vulnerable to the termination of reflationary trading and may soon test new multi-month lows against the dollar.
Nordea Bank believes that the euro should decline even more against the dollar in the second half of the year, as the ECB maintains its extremely soft monetary policy while the Fed is approaching tightening. The US central bank considers the recent increase in inflation temporary, but eventually the regulator will face high and constant pressure on the level of wages. This means that the bias towards tightening, indicated at the Fed meeting on June 16, is likely to continue in the third quarter. The ECB mainly faces temporary inflationary effects and therefore can afford to print money longer than the Fed, which will lead to a depreciation of the single currency in the long run.
Forex trading. Euro-Dollar EUR/USD signals for today, June 30, 2021
The forecast expects a decline in the Euro-Dollar exchange rate to the levels of 1.1900, 1.1875 and 1.1850.