Analysts More Pessimistic On Euro/Dollar Recovery

ByBridgeNews Analysts are now more pessimistic about a euro/dollar recovery than four weeks ago, a survey by BridgeNews and the Bridge Focus groups in Europe showed. Only 21% of respondents see short-term upward potential for the euro, compared with 50% previously. The euro is not even seen reaching parity with the dollar by the end of 2000, and rising to only US$1.05 by the end of 2001. The euro was trading around the $0.90-mark earlier this week. Most analysts see the euro trading unchanged against the dollar in the next two weeks, with six out of 28 predicting an upward movement, while five see a downward one. The estimate for the euro rate by the end of the third quarter has declined to $0.91 from the $0.94 forecast in the last survey four weeks ago. Responses ranged from $0.88 to $0.98 for one euro, compared with $0.92 to $0.98 at the last survey. Longer-term forecasts also reflect a more skeptical outlook for the euro. Analysts see the euro at $0.95 by the end of this year, compared with parity estimates given in the last survey. For the end of 2001, analysts predict the euro will reach $1.05, compared with a more optimistic forecast of $1.10 to the euro given before the last council meeting by the European Central Bank.