Dutch International: The euro against the United States dollar is underestimated and will appreciate slightly in the coming weeks

On 14 August, Francesco Pesole, an analyst of the Netherlands International Group, stated in a report that the euro now appears to be undervalued against the United States dollar, and that the next few weeks will see a moderate appreciation. He states: “Our model shows that the short-term fair value of the euro/United States dollar is between US$1.1,600 and US$1.1650). He noted that this was largely due to a narrow interest margin between the two-year swaps and therefore the euro against the United States dollar. However, unless the Fed comes forward to press interest rate increases, there is little chance that the euro/dollar will rise to $1.16 in the coming days. Kim Xian