The Euro Will Rise To 1.11 Against The US Dollar At The End Of 2017.

The result of the US general election is enough to make the euro fall out for a few months and fall to parity with the US dollar in 2017.

With the US Federal Reserve reducing the rate of interest rate hike this year, although the ECB has continued to increase its stimulus, the speculation that the euro fell to parity with the US dollar has been calm.

But now

The election has once again ignited the expectation that the US dollar will rise sharply against the euro for 2014-2015 consecutive years.

George Saravelos, a strategist at Deutsche Bank, said: "(Policy) differences reappear." (Shaarawi North)

Trump's victory has changed the situation.

Trump's election as the next president of the United States once again inspired the market's expectations of the US's departure from the euro zone's economic policy, which investors bet on for the first time since 2002.

According to Bloomberg data, traders believe the euro will fall to 45% against the dollar parity next year, almost double what it was a week ago.

Trump promised to increase spending and tax cuts. The market believes that this will stimulate the growth of the US economy and the pace of the Federal Reserve's interest rate hike will also accelerate.

Such expectations rose to the highest level since the dollar rose to its highest level since February, while the euro fell to the lowest level since 2015, against the dollar in February.

Shaarawi North predicted that the euro would fall to 1.05 against the dollar at the end of the year and fell to 0.95 in 2007, the lowest level since 2002, but the consensus of Wall Street is that the euro is still stronger than the euro.

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According to Bloomberg's median survey, the euro will rise to 1.11. at the end of 2017.

The strong performance of the US dollar in recent days is completely opposite to that before the election.

Earlier, it was widely believed that Trump's election would trigger a fall in the dollar, as investors expected the volatility of financial markets to force.

Deferred interest rate increase.

But then the focus shifted to the Trump administration's possible economic stimulus measures.

The Republican Party has promised to increase capital investment in roads, bridges and airports from US $500 billion to US $1 trillion over the next ten years.

According to Peng Bo, traders now believe that the Federal Reserve's probability of raising interest rates next month is 92%, up from 80% a week ago.

Deutsche Bank estimates that if the Fed raises interest rates next month, the US dollar will become one of the most profitable currencies in the G10 group.

The difference between the yield of us 10 - year treasury bonds and German bonds of the same type has reached its largest level since 1990.

Before the election, hedge funds and other large speculators were confident of the dollar's prospects in the context of the steady job market in the US.

According to CFTC data, by the week of November 8th, investors increased the number of US dollar positions to 22100 hands, the highest level since February.

"We believe the euro will fall to parity against the US dollar in the first quarter of 2017," said Enrique Diaz-Alvarez, chief risk officer at Ebury, a foreign exchange broker in New York.

Trump's policy of expanding fiscal expenditure will only accelerate the pace of raising interest rates for an economy close to full employment.