EUR/USD: Euro could enjoy some appreciation in the second half of the year – NBF

The Euro has pulled back from the multi-month highs seen earlier in February. Nonetheless, economists at the National Bank of Canada expect the shared currency to strengthen in the second half of 2023.

Markets think that the ECB is positioned to continue raising interest rates

“Data in the Eurozone is suggesting that inflation may be more resilient than initially anticipated while growth has not dropped off as expected. Consequentially, markets think that the ECB is positioned to continue raising interest rates. Still, that comes with a slew of risks and the potential for currency volatility.” 

“Assuming growth remains positive, and the ECB can keep rates at their terminal point, it could set the stage for some Euro appreciation in the second half of the year.”