What will the euro exchange rate be in October 2021: what experts say

2024 Author: James Gerald | [email protected]. Last modified: 2023-12-17 14:00

Structural changes in the economic factors of the Eurozone, political changes and phenomena of a social type - all of this will, to one degree or another, affect what the euro exchange rate will be in October 2021. Economic recovery after the pandemic crisis imposes new realities on the degree of currency stabilization. On the other hand, the issue of Nord Stream 2 dictates its own rules for the movement of flows in the EU. Find out what threatens the euro in October - rise or fall, the limits of possible actions, the further behavior of the European currency.

What to expect from the euro in October 2021

COVID-19 has imposed a significant amount of financial burden on European countries. The relaxation of restrictive measures will ensure a quick and stable movement towards the exit from the crisis. Experts believe that this is actively helped by stimulating work on the part of the ECB. The real interest rate in the European area is consistently above zero, while in the US it is still below this mark. Thus, the euro will maintain its advantage over the dollar in the coming year. Strong demand for risk in global markets is driving the trend towards a significant strengthening of the dollar against the euro.

Long-term peaks of the euro against the dollar led to a sharp resistance to the strengthening of the ruble, which is also associated with the political situation and sanctions against the Russian Federation.

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The growth of risks in the global financial system is associated with global changes in the world political arena, which would logically subject all currency values to adjustments. In the question of what the euro exchange rate will be in October 2021, there are some guarantees - in recent months, in almost any excitement, the currency has remained stable at 86-88 rubles.

Some factors affecting the state of the currency relative to the market:

• The state of the economy. A lot of money has to be allocated to fight the pandemic, which leaves a significant imprint on the market's ability to adapt to new conditions. Severe quarantine measures do not best regulate the activities of enterprises, both small and large. The issue especially touched upon the tourism and hotel business, air transportation. The gradual removal of restrictions is slowly returning life to its usual course. However, experts expect a new wave of coronavirus in early autumn, which means that the euro exchange rate depends on this unpredictable factor.
• PMI (Purchasing Managers' Index). Simply put, the business activity index is an indicator of the state of a particular industry. Now the service sector index is in a strongly underestimated position - 11, 7 versus 23, 8. In the industrial sector, things are better - 33, 4. Thanks to the exit from the lockdown in some countries, it overcame the historical minimum and entered the stage of growth.
• Statistics. Free access to statistics sometimes plays into the hands of the currency, and sometimes it doesn't. In this case, the reports show a decline in the euro's reputation, but further prospects for improvement are already looming on the horizon. This is facilitated by the development of effective measures aimed at economic growth. They also include the issue of vaccination as a primary tool for the restoration of socio-economic movements.
• ECB and policy vector. Politics primarily affects the position of the euro in world trade. Key rates have been kept at the same level. For loans - zero, 0.25% - margin, 0.5% - deposit. This may disorient the euro as a currency, but stimulus measures to mitigate the effects of the pandemic announced by the ECB are the way out. The conditions for long-term reinvestment have improved, risky assets of European countries are being bought. What will be the euro exchange rate in October 2021? Most likely, it will reach a plateau under favorable conditions of the economy and social relaxation, otherwise the collapse of the currency is possible.
• The Brexit that took place greatly influenced the authority of the European Union due to the severance of relations with the UK. For this reason, the euro has become a less stable asset.
• Pleasant forecasts. The ECB says that GDP growth in the second half of 2021 changed from 4.3% to 4.8%. This is due to the stable rate of vaccination in Europe and the positive dynamics of containing the pandemic. According to experts, the volume of GDP will return to pre-crisis values by October (unless another emergency occurs). The unemployment rate is also correcting downward.
• Trade balance. Severe coronavirus disruption has impacted trade partnerships, but the ecosystem of financial interactions is smoothly recovering. If we avoid another wave of COVID-19 in the fall, the balance will correct and the euro will strengthen.

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Buy or Sell?

If the national currency weakens against the euro, then the level of 91-92 rubles will be acceptable for buying foreign currency. This is the median level of the semi-annual flat of the EUR-RUB pair.

Scenarios where the cost of the euro will exceed 100 rubles are not considered. Technically, the picture reflects the rate of deceleration in euro growth after six months of growth. The market reaction to particularly important events is unpredictable, which means that it is impossible to reliably predict whether the currency will fall or rise. Market surveillance requires vigilance and lack of harsh moves.

If speculative transactions are planned, you should wait for values of 91, 40 rubles. for buying and 86, 25 for sales.

Outcomes

The opinions of the experts, as expected, diverge. For example, representatives of Citibank say that the euro will confidently conquer the peaks further, according to the analysis, a net quick sale of the euro gives a good probability of profit. The cost vector predicts a decrease due to general fears of a new wave of a pandemic and the introduction of NordStream-2. However, one should not forget about the growing volumes of European production and the successful pace of vaccination. Closer to September, it will become obvious what the euro exchange rate will be in October 2021, and how the EUR / RUB pair will react to the new conditions of economic interaction.