Published on 01/07/2025 at 4:21 p.m.
The single currency has fallen by more than 7% against the greenback since the end of September.
(Boursier.com) — Soon the return to euro-dollar parity? This is what several analysts anticipate, betting on the engine that the arrival at the White House of Donald Trump should constitute for the dollar. Scheduled for January 20, this inauguration will be followed by the launch of the Republican’s economic program, which promised customs taxes and tax cuts in the United States.
The return of Trump and the threat of a trade war, which would hit Europe hard, could lead to a return to euro-dollar parity as early as January, according to strategists at the New York Mellon and Mizuho banks.
-“We are not far from it”
“We’re not far from it, so it could happen very quickly,” Geoffrey Yu, senior strategist at BNY, was quoted as saying by the Bloomberg news agency. He anticipates a low point for the euro around the meetings of the Federal Reserve (January 29 and 29) and the European Central Bank (January 30). “Parity is inevitable”, in his eyes.
The single currency has fallen more than 7% against the greenback since the end of September, falling last week to $1.0226, its lowest level in more than two years. Its reaction to Trump’s policy is very sensitive: rumors on Monday in the American press of less aggressive customs tariffs than expected, applying to sectors considered essential for national or economic security, caused the euro to jump by more than 1%.
parity
Since its entry into force in 1999, the euro has only exchanged at parity with the dollar on a few occasions. The last time was in 2022, after the start of the Russian invasion of Ukraine. The conflict had triggered an energy crisis in Europe and raised fears of a recession, Bloomberg recalls.
