New York (awp/afp) – The dollar rose to a two-year high against the euro on Friday, a movement based on a divergence in economic and monetary trajectories, which makes the hypothesis of parity between the two currencies credible .
Around 9:15 p.m. GMT, the greenback gained 0.56% against the single currency, at 1.0416 dollars per euro. Earlier, the currency common to 20 European countries had fallen to $1.0335, a first since the end of November 2022.
The inflection was triggered by poor indicators in the euro zone. The PMI index notably showed that in October, economic activity had posted its weakest pace in ten months in November.
These data “paint a worrying picture of the situation in Europe”, commented Christopher Vecchio of Tastylive. “They are sliding into recession much faster than anyone expected.”
“If we add the prospect of new tariffs from Trump and a possible trade war, this further reduces Europe's growth prospects,” continues the analyst.
At the same time, the composite PMI index (for the entire economy) from S&P Global for the United States stood on Friday at its highest level for two and a half years in November.
This contrast plays on the difference in orientation between the monetary policy of the European Central Bank (ECB) and that of the Federal Reserve (Fed).
“The market sees the Fed targeting a neutral rate of 3.80% compared to 2.80% at the start of October,” note Wells Fargo analysts, referring to the rate at the end of the monetary easing cycle.
It is called neutral because it does not slow down economic activity but it does not help accelerate it either.
At the same time, operators see the Fed's main key rate falling to around 1.7% at the end of 2025.
As a result of this divergence, the gap between the yield on 10-year German government bonds and that on American Treasury bonds of the same duration is close to its highest in five years, which encourages investors to turn even more towards the dollar, to the detriment of the euro.
To all the factors weighing down the euro was added this week the escalation of the conflict between Ukraine and Russia, Wells Fargo analysts pointed out.
“The question of parity (between the two currencies) arises,” believes Christopher Vecchio. “The real question is rather whether we are going to test it this year or next year”;
Euro and dollar have not been at the same level since November 10, 2022, at the end of a five-month sequence which saw the “greenback”, nickname of the American currency, exceed the single currency for the first time in twenty years.
Cours de vendredi Cours de jeudi 21H15 GMT 22H00 GMT EUR/USD 1,0416 1,0474 EUR/JPY 161,25 161,87 EUR/CHF 0,9315 0,9287 EUR/GBP 0,8311 0,8320 USD/JPY 154,81 154,54 USD/CHF 0,8943 0,8867 GBP/USD 1,2532 1,2589
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