Why Odds Are Stacked Against Strong Euro
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The euro has gained more than 4 percent against the U.S. dollar since mid-May, but forex analysts tell CNBC that the single currency is headed lower.
After hitting a four-month high of $1.339 on Thursday, the euro is expected to retreat back to $1.25 by the year-end - levels unseen since September 2012 - according to experts.
Michael Woolfolk, senior currency strategist at the Bank of New York Mellon, said downside risks to the euro remain despite its recent rise.
"Once we get beyond Angela Merkel's re-election in Germany this Fall, I think there's added volatility to the euro and downside risks," Woolfolk told CNBC Asia's "Squawk Box" on Friday, referring to Merkel's pledge last month that her election campaign will focus on defending a strong euro.
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