The Euro Has Fallen By Nearly 8% Against The US Dollar.

The US dollar rose and the euro fell. The Federal Reserve raised interest rates in December, while the European Central Bank widened. The division of monetary policy in the two largest economies on both sides of the the Atlantic Strait widened.

Then, will the euro exchange parity with the US dollar?

After the outbreak of the financial crisis, the European economy was in deep mire. Despite the signs of recovery, it is still hard to recover.

In December, the European Central Bank announced that it would further lower the negative interest rate and extend the QE time and scale.

The biggest move since QE started this year.

In the three quarter of this year, GDP in the euro area increased by only 0.3%, but in the same period, the US economy grew by 2%.

In addition, the euro zone CPI continued to slump this year, as shown in the chart:

In March this year, the Royal Bank of Canada was quoted.

Elsa Lignos, senior currency strategist at RBC Capital Markets, predicts that the euro will hit 1 euros to 1.05 dollars.

The closer the 1.05 level is, the louder the prediction of parity will be.

The decline in the euro against the US dollar is mainly due to stronger US dollar rather than weaker euro.

The parity between the euro and the US dollar is not a fantasy.

Euro area CPI growth year on year:

Since the implementation of the QE by the European Central Bank at the beginning of this year, the euro has fallen by nearly 8% against the US dollar, and it fell to 1.05 in March this year, down by about 10% compared with the beginning of the year.

Kathy Lien, general manager of BK Asset Management, said there would be no parity between the euro and the US dollar.

Many analysts expected the euro to parity with the US dollar in 2015, but this year has not yet appeared.

Big banks such as Goldman Sachs, Deutsche Bank and Paris Bank of France still expect the euro parity parity to be realized in 2016.

Although the Federal Reserve will increase interest rates next year and the European Central Bank's easing policy will result in pressure on the euro, the euro dollar parity is just to attract eyeballs.

Experienced traders say that exaggerated goals are difficult to achieve.

Kathy Lien believes that the euro will lower the exchange rate against the US dollar next year, and is expected to fall to 1.05. The euro zone economy will largely benefit from the European Central Bank's stimulus policy and the weak euro. The euro zone's economic data will further improve, so the ECB will be more optimistic about the economy and expand the pressure of stimulus, so the euro will gradually rise.