On April 29th, the rapid appreciation of the euro has attracted the attention of officials on both sides of the Atlantic, and this trend shows no signs of slowing down, intensifying market expectations for further interest rate cuts by the European Central Bank. JPMorgan Chase, BNP Paribas, and Danske Bank expect 1 euro to be convertible to $1.20 or even more by the end of the year, which is significantly different from some analysts’ expectations for parity three months ago. This month alone, traders have increased their bets on the European Central Bank’s annual interest rate cuts by about 0.5 percentage points. European Central Bank President Lagarde called the rally “counterintuitive,” and even US Treasury Secretary Vicente spoke out on April 28th, believing that Europe would further cut interest rates to curb the strengthening of its currency.
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