Will the dollar strengthen and surpass the euro by the end of the year?

We are witnessing the weakening of the American dollar against all major world currencies in recent weeks. Thus, against the euro, the American dollar has weakened by 4%, and against some other currencies even more than 6%. Currently, EUR/USD is trading at 1.2675, which is nearly the highest level in the last six months.

The American dollar is weakening as a result of investors’ reactions to comments from representatives of the European Central Bank and the American Central Bank. Mario Draghi stated that he does not expect further easing of monetary policy in the eurozone, which investors interpreted as the end of the easing of monetary policy that has been in place since the beginning of the financial crisis, leading to massive purchases of the European currency, which automatically raised the value of the euro against the American dollar.

On the other hand, the chairwoman of the American Federal Reserve Board stated that the situation in the U.S. is good, but the poor economic situation globally poses a risk, and she emphasized that the tightening of monetary policy will be gradual, which investors interpreted as negative news for the American dollar, prompting them to sell it against all other currencies.

According to experts, the weakening of the dollar is only a temporary phenomenon caused by dollar purchases, leading to situations where there are no buyers who can continue to raise its value with new purchases.

The American Central Bank will have to raise interest rates to prevent inflation. At the same time, the European Central Bank will not be able to tighten monetary policy for years due to the poor situation. The difference in interest rates between the EU and the U.S. will continue to increase, resulting in even greater demand for the American dollar, which will raise its value against the euro.

The dollar could strengthen by as much as 10% by the end of the year and surpass the euro.

Currently, there is no soybean meal available in Koper’s domestic grain market, but the arrival of a new ship is expected as early as tomorrow. The goods will only be available on Tuesday, and until then, goods from the Rijeka port silos are available.