Dollar reaches 7-month peak; Nomura adds to Goldman's call for parity
The greenback has risen to a seven-month high against the euro on Tuesday with several financial companies predicting euro-dollar parity in the near future.
Earlier, Japanese financial company Nomura added to Goldman Sachs's recent call
for parity between the dollar and the euro by the end of 2015.
"Conditions for a test of parity may finally be falling into place," said Jens Nordvig, managing director of currency research at Nomura Securities.
While Nomura has been downbeat on the euro since the U.S. dollar rally became vivid in the second half of 2014, the analyst only recently started to reflect on the idea that parity with the greenback could be likely.
Nordvig added that positioning on the euro is also "less extreme" than it was near the start of 2015, with investors holding fewer short positions on the shared currency. This eases the euro's inclination to overreact to economic data or policy decisions that do not back the consensus trade for further weakness relative to the U.S. dollar.
The high stock of European sovereign debt with a subzero yield will further restrain capital inflows, he notes.
Against the euro, the dollar has hit $1.0643 - the strongest level since April 16. EUR/USD last traded at 1.0667, down 0.19%.
Meanwhile, European Central Bank Executive Board Member Peter Praet said in an interview with Bloomberg that risks of inflation expectations in the euro-area becoming de-anchored. His remarks are viewed as a nod towards further easing from the ECB at its December meeting.
