The Euro has gained some ground against the US dollar today but some analysts say it may be short lived, and as we move forward, the American currency is the one to own.
At 6.17pm (GMT) the euro was trading at US$1.1092c up from US$1.1073c in yesterday’s trading.
With all of the volatility surrounding Britain’s decision to leave the EU the US dollar is going to become a currency safe haven according to some like David Kohl, Julius Baer’s Frankfurt-based head of foreign-exchange research,
“The dollar is less owned than the yen as a safe-haven currency, and given that this issue of Brexit will be with us for more weeks and months, there’s a natural demand,” he said
“We used to be proponents of a weaker dollar. For the next three months this could change massively.” He added.
Another fan of a stronger US dollar is Jeremy Stretch, London-based head of foreign-exchange strategy at CIBC who noted there is a possibility that the US Fed will still raise rates this year while the other 2 major economies are likely to increase their money supply,
“The consequence of the ongoing uncertainty in markets, where we see two of the big three global central banks still biased toward additional monetary easing, and ongoing uncertainty for the U.K., with potential easing there, is that the dollar is going to be a beneficiary,” he said.