Commerzbank: Euro to recover to $1.14 in Q3
The reduction of the US dollar's advantage of higher interest rates after the recent steep decline in the Federal Reserve's federal funds rate to 0.00%-0.25% due to the coronavirus pandemic should allow EUR to rise to US$1.14 by the end of the year, where it will also be traded in the first half of 2021, Commerzbank said.
Its forecast assumes the recovery of the eurozone economy in the second half of the year. Eurozone economic problems and possible obstacles to the implementation of the European Central Bank stimulus program may constrain euro in the short term.
On Tuesday, German Constitutional Court gave the European Central Bank three months to justify purchases under its bond purchase program or to exclude Bundesbank's participation in one of its main incentive schemes.
Today, Christine Lagarde made statements that all actions of the regulator are within the framework of European laws. The European Court of Justice also commented on the situation, pointing out that only it can assess the legitimacy of actions of supranational European bodies.
EUR/USD rose by 0.36% to 1.0876 on Friday.