Dutch International: The Fed rate hike bet seems excessive, Euro against the US dollar may rise

Francesco Pesole of the Dutch International Group stated in a report that the euro may rise against the dollar due to excessive expectations of US interest rate hikes. The market expects the Fed to raise rates before October, but the Dutch International Group does not expect a policy tightening, so the dollar is expected to weaken in the third and fourth quarters. Despite a recent drop in oil prices due to a temporary peace agreement between the US and Iran, the euro has still fallen against the dollar. "We are in an environment where correlations are rapidly changing, with the Fed's interest rate expectations taking strong control at a time when oil prices are almost irrelevant," Pesole said. Data from the London Stock Exchange Group shows that the euro earlier hit a three-month low of $1.1416, and now stands at $1.1461. The Dutch International Group expects the euro to reach $1.18 by the end of the year.