Report: Euro rate above 1.10 USD/EUR level only temporary

Baku. 16 May. REPORT.AZ/ Euro rate against US-dollar at 1.10 USD/EUR is temporary.

Analytical Group of Report informs, exchange rate will return to 1,04-1,10 USD/EUR range soon.

"The fall of the dollar is associated with the policy of US President Donald Trump called "strong dollar is hurting US economy”. However, it should be noted that the strong US economy, low unemployment, exceed of 2% target by inflation will force Federal Reserve System (Fed) to increase the discount rate at next meeting.

“Discount rate is expected to raise at June 13-14 meeting", analysts said.

Also, it should be noted that the increase in discount rate by Fed from current level of 0,75-1,00% to the level of 2% has already been reflected in dollar exchange rate. Thus, the euro/dollar exchange rate over the past years dropped from 1.60 USD/EUR level to the 1.04 USD/EUR and now settled at 1.1060 USD/EUR level. This also suggests that if discount rate is increased, the strengthening of the dollar will not wait for a while.

Analytical Group said that the next storming start in rise of the dollar will be in second half of 2018 and can reach 0.85 USD/EUR: "So, the dollar will be stronger than euro. On the second half of 2018, Fed's monetary tightening is expected to start and it will begin to reduce its balance. This will create a shortage of dollars in the world, including the US”.