Euro Forecast

JP Morgan has downgraded its growth forecasts for China in a development that offers support to the Dollar while weighing on the Euro which is highly sensitive to growth prospects in the world's second-largest economy.

"All this is likely to keep the US dollar supported for a while longer" - XM.com.

Matthew Weller, Global Head of Research at FOREX.com, reports that the U.S. dollar is experiencing a rise against all major rivals, including the Euro, despite the absence of significant U.S. economic data.

Analysts at Goldman Sachs have upgraded their tactical stance on the British Pound to "outright constructive" amidst a surprising UK economic resilience and fading central bank divergence risks.

The British Pound has come under pressure against the Euro in May as investors bet Thursday's European Central Bank (ECB) interest rate decision and guidance will see it maintain its crown as the most hawkish of the major central banks.

The EUR/USD is clearly going to be in focus this week with both the Fed and ECB rate decisions to come ahead of U.S. non-farm payrolls report on Friday.

EUR/USD has peaked and will likely trend lower over a three-month horizon, before rebounding strongly over the 12-month horizon.

The Euro is in demand and this will likely remain the case into the early May ECB interest rate hike.

The Euro to Dollar exchange rate (EUR/USD) is forecast higher at HSBC with analysts saying their conviction has been cemented by the most recent set of Balance of Payment (BoP) figures from the Eurozone.

UniCredit Bank forecasts further Euro gains against the Dollar that will bring new year-to-date highs above 1.10.

The Pound to Euro exchange rate was pushed back to early February lows last week and the risk is that any attempted recovery is hampered this week by a renewed ebb of the inflation tide on Wednesday.

Stock index futures and crude oil also jumped. The EUR/USD neared 1.10.

GBP/EUR near year's highs but with obstacles ahead.

"I reckon it is a matter of time before the EUR/USD breaks that barrier" - Fawad Razaqzada, City Index.

GBP/EUR rallies continue to be frustrated by selling pressure that ultimately tends to dump the pair back into a well-trodden range.

Currency tacticians at HSBC are looking for the Dollar to test 2023 lows over the coming weeks, allowing for a higher EUR/USD.

The British Pound's outlook remains upbeat in the near term although headwinds will likely ensure the prospect for substantial gains remains limited, according to one of Europe's largest commercial and investment banks.

Euro exchange rates can depend on further interest rate hikes at the European Central Bank (ECB) on news inflation in the Eurozone's largest economy continues to see broad-based inflationary pressures.

GBP/EUR could fall below 1.10 says Morgan Stanley, such levels are associated with 'crisis'.

The Dollar index is poised to extend its recent run of losses, according to a new analysis, a move that will offer a near-term boost for EUR/USD.