The euro endured hard times this year as the financial crisis in the European Union made us question the very existence of the currency. Therefore, the rally it showed this summer was rather unexpected. The experts expected the rally to end soon, perhaps even this month. Does the outlook changed? Not much, though it became somewhat more bullish.
The bears point out that the countries such as Greece, Spain and Portugal can drag the EU economy to the bottom, causing the European shared currency to collapse. The good example of such viewpoint is the words of editor of the Gartman Letter:
The euro has had a spectacular bounce. Were all of the problems that were attendant and discussed and so obvious in February, March and April of this year, have they been alleviated? Not even slightly. The major trend for the euro is still toward disintegration.
The bulls say that the European economy more stable than perceived.
Despite all the good signs, and even as the US is becoming next major reason for the concerns, the sentiment among the economists still remains pessimistic for the euro. The rally may end any time and the speculations persist about the possible parity with the US dollar or even the disintegration of the 16-nation currency. The forecast were revised upward but the euro still expected to decline versus the greenback to 1.22 by the end of this year.
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