Euro/dollar could rise in the event of a global economic downturn, according to BNP Paribas.
September 17, 2024, 6:16 PM GMT+9 (excerpt)
BNP Paribas Markets 360 has indicated that there is a possibility for the euro to rise against the dollar in the event of a global economic downturn, resulting in different price movements compared to before.
According to Sam Rinton Brown, the global head of macro strategy, the dollar is currently being used as a high-interest rate currency, making it easier to sell with the Fed's rate cuts. The reason is that the current policy interest rates in the USA significantly exceed the neutral rates of many other countries.
Furthermore, the spreads of euro denominated bonds in the euro area and peripheral countries are less affected by risk-off situations, which also contributes to the rise of the Euro.
He stated, "If the USA were to experience a hard landing, we would become even more bullish on the Euro/Dollar."
According to Sam Rinton Brown, the global head of macro strategy, the dollar is currently being used as a high-interest rate currency, making it easier to sell with the Fed's rate cuts. The reason is that the current policy interest rates in the USA significantly exceed the neutral rates of many other countries.
Furthermore, the spreads of euro denominated bonds in the euro area and peripheral countries are less affected by risk-off situations, which also contributes to the rise of the Euro.
He stated, "If the USA were to experience a hard landing, we would become even more bullish on the Euro/Dollar."
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