Important points:
- Euro hits flatline at $1.04
- Not much to watch in 2025
- Interest rate cuts play a key role in valuations
The Old Continent's currencies continue to suffer losses since the beginning of the year, but what's worse is that the future doesn't look bright.
- of
euro dollar pair Friday morning was particularly dull, with few active buyers or sellers to stir up trade. The exchange rate was close to the $1.04 flatline, and while there was a slight divergence to the upside, it was not enough to change the pace by more than a few pips. No matter how you look at it, the euro is coming off a disastrous year with a 5.7% loss. But what's even more worrying is that there's no real reason to expect growth next year (at least not yet). - economy is not economic The currency of the Old Continent. Slower growth and the lack of prospects for support for the euro are driving investors away from the euro. Eurozone gross domestic product (GDP) grew by 0.4% in the third quarter. During the same period, U.S. economic growth was a solid 2.8%. Looking ahead, continued interest rate cuts are expected to continue to put pressure on the euro.
- The European Central Bank said: At its last meeting, it aimed to reduce borrowing costs by at least a further twofold by early 2025, but left room for further cuts if necessary. And interest rate cuts are the most powerful tool for central banks that want to revitalize a stagnant economy. In contrast, the dollar was boosted by the US central bank's (Fed) announcement that it aims to cut interest rates twice in all of 2025.
