In the global currency market, the pressure on the euro is growing due to investor concerns about the prospects for economic growth in both China and the eurozone.
This is due to Donald Trump’s plans to introduce broad import duties, Alina Poptsova, an analyst at the Alfa Capital Management Company, told the Prime agency.
Such steps may require the ECB to more actively ease monetary conditions in order to support GDP growth. Accordingly, the pace of interest rate reduction in the eurozone may be faster than in the United States.
Thus, the Federal Reserve is signaling greater caution in reducing rates, noting high rates of economic growth and stable inflation. And if the ECB is likely to cut the rate in December and in the first quarter of 2025, then the Fed cannot rule out a pause in December if inflation is higher than expected.
Thus, due to the different speed of rate changes by US and European regulators, it is likely that the euro could reach parity with the US dollar by March 2025.