The collapse of the euro is unlikely say currency analysts at BarCap
- Details
- Category: US Dollar Exchange Rate
- Published on Wednesday, 21 September 2011 11:39
- Written by Rob Samson
The euro dollar exchange rate is unlikely to fall very far below 1.20 say currency analysts.
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The pound euro exchange rate is 0.257% lower with 1 GBP = 1.1464 EUR.
Analysts at Barclay Capital have said today that they see the euro dollar exchange rate weakening in the near term.
They have however ruled out a full scale collapse of the single currency.
In an exchange rate note on the euro released today Sara Yates at Barclays says:
"Many investors have been frustrated by the resilience of EUR/USD given all the problems. Despite the deterioration in prospects we should not forget the reasons why it has held up.
"First, European policy makers have generally done what was necessary to stabilise concerns in the short run.
"Second, the ECB has been assiduous in keeping the anti-inflationary faith.
"Third, this is primarily an internal problem, not one that the currency plays a big role in solving.
"Fourth, the USD has been very weak because of both monetary policy and the structural problems in the US. Despite the deteriorating prospects, none of these has changed completely, though all are likely to come under pressure, for the reasons above. We think this means that EUR weakness will be marked but not catastrophic. We do not think it at all likely that EUR/USD will fall significantly below 1.20 even if conditions deteriorate more than we expect."
