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Morgan Stanley estimates that the euro will get similar to the pound in 2018
The American bank for investments Morgan Stanley increased their estimates regarding the evolution of the euro, reaching 1.25 dollars since the beginning of next year and it will be equal to the pound in 2018 for the first time in its history of 18 years, Reuters and Bloomberg say.
The rejection of the populist movements which threatened to deestablish the European Union will help to increase the euro in the years to come, Andrew Sheets considers, an analyst with Morgan Stanley.
He considers that ‘ the markets will concentrate on the idea that the heart of Europe – France and Germany - work together towards a European Union which is stronger, with pressure to adopt some reforms which have been already seen in the latest years. Structurally, these evolutions will lead to the appreciation of the euro’.
This year, the euro improved with 12% against the dollar, as the improvement of the economic growth and the diminution of the worries regarding the accession of the populist movements.
The Morgan Stanley analysts expect the new depreciation of the pound, due to the weak growth of the economy, of high inflation and the increasing uncertainties regarding the Brexit.
The pound went down on Friday down to1,2978 dollars /pound after Thursday when it was traded at 1,2952 dollars/pound, the lowest level of the last three weeks. Similarly, the British currency went down with 0.2% against the euro, down to 90.56 penny/euro.
The vote of 23 June 2016 when the British voters chose to leave the EU started the trouble on the global financial markets, and the pound went down with 15% against the dollar.
By activating article 50 of the Lisbon Treaty on 29 March the UK initiatied a process of negotiations which would last for two years and after which the conditions for the Brexit will be established.