Experts differed in their estimates of the euro-dollar exchange rate for 2019. Thus, some predict the growth of the single European currency next year, arguing that investors will divert their attention from the overvalued dollar. Others are determined to weaken the euro due to various political and economic factors associated with Europe.
"The crisis in Italy is still able to flare up with a new force, therefore early elections can take place in the country in March. In addition, regular elections to the European Parliament will be held in May, and a new ECB President will be appointed in October," said Neil Dwane of Allianz Global Investors.
According to him, the euro is at risk of sagging against the dollar at the beginning of the year, which is why the ECB will probably not be able to raise the interest rate at all next year.
"The capitulation of the euro is not yet complete. In Europe, there is a gradual deterioration of sentiment, " said Paul O'Connor of Janus Henderson Group.
Meanwhile, experts of Toronto Dominion Bank believe that the ECB will begin to raise the rate earlier than expected.
"This is a serious challenge, but we hope that the regulator has a very strong desire to get out of the ultra-soft monetary policy as soon as possible. Next year, the euro is expected to strengthen to $1.27 against the dollar, "said Ned Rumpeltin, currency strategist at TD Bank.
A similar view is shared by representatives of Morgan Stanley.
"We believe that in 2019 the Fed will take a break in the cycle of raising the interest rate, while the ECB will eventually come to increase it. We expect the single European currency to grow to $1.31. For the dollar, winter will come soon, and for the euro – spring," they said.
