The Euro has experienced a bit of a breakthrough since the beginning of the year. The potential for further appreciation will hinge on economic resilience and policy change by the Federal Reserve, economists at the National Bank of Canada report.

Euro will witness some volatility over the next few months

“We believe the Euro will witness some volatility over the next few months as new data comes in and we get a better idea of where the Fed and the ECB intend to go.”

“The current level for the Euro is probably rich considering that there are still significant risks for a recession in the common area. Still, a Fed pivot would likely mean further moderation in the trade-weighted USD and would provide a lift for most major currencies in the second half of the year. As such, we do see the potential for some upside on the Euro later this year.”