The euro rate may return to 1.20 USD, the expert insists
The euro to dollar rate oscillates around 1,17 USD, but, as Kit Juckes, head of strategy at Société Générale, claims, it may soon change direction.
"For most of last year and at the beginning of 2026 the EUR/USD rate grew faster and more than what relative interest rates would suggest, in response to the belief that if President Donald Trump wanted to weaken the dollar, he would probably succeed," he said.
"Currently however the EUR/USD rate lags behind the interest rate market. That makes sense – it is expected that the U.S. economy will grow much faster this year than the eurozone economy, is less vulnerable to oil price shocks and still enjoys the status of a safe haven, even if the number of articles on dollarization and the end of dollar hegemony grows day by day," he added.
Juckes said that the key element still affecting the currency market remains the Middle East conflict.
Despite Trump announcing an extension of the ceasefire, investors still await a lasting breakthrough.
More on this was written in the article: Dollar rate will see a breakthrough? Trump decided on peace in Iran. Expert: "Getting there is full of pitfalls"
"Today's rise in the rate towards 1.18 neutralizes all the falls since the start of the U.S. and Israel war with Iran. It stems from optimism that an agreement to reopen the Strait of Hormuz will be reached, and oil prices (and supply) will soon return to more normal levels," Juckes said.
Currently there is a very high chance, that if a new easing of the conflict actually occurs (and especially the reopening of the Strait of Hormuz), the EUR/USD rate will easily return above 1.20 on a wave of positive sentiment.
"Interestingly, the fall in energy prices would weaken arguments for raising interest rates by the European Central Bank (and other institutions). Further growth in the euro’s value would also raise concerns among some ECB members," he added.
Société Générale economists expect the European Central Bank to decide on two 25 basis point hikes this year.
According to their predictions, changes in the eurozone may come in June and September.
On the other hand, experts forecast no action from the Federal Reserve.
"The FOMC will sit with its hands folded and do nothing. That is also the market’s expectation, so it should not have a greater impact on the current situation, but it increases the likelihood of further EUR/USD rate growth," Juckes summarized.
Interest rates in the eurozone are currently at 2,15%.
The next ECB Governing Council decision on this matter will be announced on Thursday, April 30.
Source: Trading Economics.
See also: Dollar rate in the shadow of the Middle East conflict. Expert: "Hard to compromise"
Euro rate on Wednesday, April 22
The euro to dollar rate on Wednesday, April 22 is at 1,17 USD.
Chart. Euro to dollar rate (EUR/USD)
Source: TradingView.
The euro to zloty rate reaches 4,24 PLN.
Chart. Euro to zloty rate (EUR/PLN)
Source: TradingView.
Read also: Euro rate will soon surprise? Expert says what will happen with EUR/PLN and EUR/USD
See also: Dollar rate before a "nervous and dynamic" move, euro waiting for a drop? Expert issued forecast for USD/PLN and EUR/USD
