THE euro is set to crash even lower against the dollar in 2017 as the disaster currency looks to hit parity levels, experts have warned.
The single currency has fallen to $1.03 in 2016 – the lowest level in 13 years - and is now on track to fall as low as $0.95, according to economist forecasts.
Jordan Hiscott, chief trader at ayondo markets, said: “The Euro is now facing a perfect storm and the next obvious level is parity with the USD, quite possibly by Q2 next year.
“The currencies are quickly moving closer in value, thanks to the strengthening of the US dollar, following the election of Trump and his Regan-era style of economics, focusing on large infrastructure spending.
"Combine this with the weakening of European regional government, the resignation of the Italian Prime Minister and the prospect of 16 separate European government elections next year, and it’s difficult to be positive about the Euro.”
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Since September the euro has lost about seven per cent against the dollar, as the two economies face different outlooks for the future.
The desperate European Central Bank (ECB) has committed to continue its money-printing programme until the end of 2017 in an effort to stimulate the economy at a worrying time.
Italy's banks are in crisis, Greece's debt deal faltering, and French and German elections are looming, which has raised fears for the future of the euro.
In contrast, the US Federal Reserve raised interest rates in December and is expected to implement multiple hikes next year, as the economy continues to grow.
Julian Jessop at Capital Economics has predicted the euro will fall to $0.95 against the euro in 2017.
He said: "There is likely to be a much greater contrast in monetary policy between the US and other advanced economies than most anticipate over the next two years.
"We expect the Fed to hike interest rates four times in both 2017 and 2018.
"This is far more than appears to be priced into the markets, even after the rise in yields following the Fed’s December hike.
"And for all the talk of the end of quantitative easing, the ECB and Bank of Japan look set to continue their asset purchases for the foreseeable future.
"In turn, this divergence is likely to put additional upward pressure on the dollar in 2017."
"We expect the Fed to hike interest rates four times in both 2017 and 2018.
"This is far more than appears to be priced into the markets, even after the rise in yields following the Fed’s December hike.
"And for all the talk of the end of quantitative easing, the ECB and Bank of Japan look set to continue their asset purchases for the foreseeable future.
"In turn, this divergence is likely to put additional upward pressure on the dollar in 2017."
http://www.express.co.uk/finance/city/746588/euro-to-dollar-exchange-rate-Currency-set-to-SINK-against-dollar-in-perfect-storm
