EUR/USD exchange rate to hit two-year low?
ING Bank head of macro and consumer economics Maarten Leen said in the latest eZonomics economic update video that the implications of the multi speed recovery were widespread.
“The European Central Bank will probably keep interest rates at current low levels and more support measures for troubled regions could be on the way,” said Leen. “In contrast, we think US strength will see expectations for a first rate hike by the US central bank brought forward.”
He said the “monetary cocktail” could push down the euro-dollar (EUR/USD) exchange rate to the lowest level in two years.
“The economic divide is clear”
The falling unemployment rate and rising levels of consumer confidence showed the strength of the US economy, said Leen. In contrast, the Eurozone had a rising unemployment rate and low levels of consumer confidence.
“A Eurozone recession is still very likely,” said Leen. “The economic divide is clear.”