Inflation pressures have increased strongly in the global economy with central banks having to take a more hawkish stance.Īccording to Credit Suisse “The reassessment in policy expectations has been seen across developed markets.

Inflation and Ukraine War Creates Major Uncertainty The ECB will also be forced to respond to higher inflation which will gradually improve Euro support and there are expectations that a US slowdown will undermine the dollar over the longer term.ĭollar bulls expect the Euro to Dollar (EUR/USD) exchange rate to weaken to at least 1.05 and possibly parity, but the consensus is that EUR/USD will post a limited gain on a 12-month view. There will be greater scope for dollar gains if risk appetite deteriorates. With the Federal Reserve adopting a more hawkish policy stance, the dollar is expected to maintain a strong tone over the next few months. The consensus among investment banks is that the war in Ukraine will hurt the Euro-zone economy, especially via higher energy costs, while the US economy will be notably less vulnerable. Ukraine War Increases Euro (EUR) Exchange Rate Risk Profile Table of EUR/USD exchange rate forecasts for the next 6-12 months.Potential Medium-Term Dollar Vulnerability.Eurozone Undermined by Ukraine War, but Inflation Surges.Inflation and Ukraine War Creates Major Uncertainty.

Ukraine War Increases Euro Risk Profile.Reference: Today's Euro US Dollar (EUR/USD) exchange rate is EUR/USD 1.0968 (-0.07%).

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