Last week the single currency was performing well enough trading in the $1.45 area against its American counterpart.

Analysts at Deutsche Bank think that euro's strength is caused by the greenback’s weakness. The specialists say that investors are using US dollar as a funding currency in carry trades borrowing in dollars and investing in the higher yielding currencies. Euro, on the other hand, isn’t used for that purpose since the European Central bank hinted on the rate hike.

According to the bank, the pair EUR/USD has potential to climb to $1.50. Then the situation may rapidly change, note the specialists, as the rate expectations are probably not going to shift much more in favor of the euro. As the sentiment about US currency has become too negative any signals from Federal Reserve may reverse the pair.

Economists at Brown Brothers Harriman also think that EUR/USD advance will be limited by $1.50 as the market will inevitably get aware about the debt problems of Spain and Portugal.

Currency strategists at Nomura Securities are the most bearish on euro as they advance to sell the currency against Swedish krona and Norwegian krone. As the reasons for being short on euro the specialists cite the excessive pricing in of the ECB hike and the possibility of oil prices decline.



Chart. Daily USD/JPY