Achieving parity between the dollar and the euro “could take longer than expected”, and “new scenarios must be expected and anticipated”. This is what three Neuberger Berman managers say, Ashok Bhatia, CFA, co-chief investment officer-fixed income, Brad Tank, co-chief investment officer and global head of fixed income, and Fredrik Repton, senior portfolio manager. “Considerable risk factors could call into question this scenario that is too established in the imagination of experts,” they believe.
“If the euro reaches parity with the dollar, it is unlikely that this will be a lasting trend, and volatility could be particularly strong over the next three months,” explain the managers.
“In 2025, the dollar is expected to strengthen, and the euro to weaken”, but “the majority of investors being of the same opinion, this could lead to a dangerous increase in transactions”, they add. US rates are expected to be 1.5% to 2% higher than Eurozone rates in the next round of rate cuts, with the Fed “worried about persistent inflation” while the ECB “is focuses on growth.
The American economy is “much more efficient than the European economy”, and “this trend should continue”, due to the lack of “immediate prospects of recovery” in Europe or in China, the main source of external demand for the Europe, and also because of the “potential trade policies of the new American government”.
source: AOF
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Belgium
