What will be the euro exchange rate in June 2021

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

2020 has become a test of strength for the economies of European countries. Already today, economists are making forecasts about what the euro exchange rate will be in June 2021. June is the month when the analysis of the efficiency of the economy for the first half of the year is carried out.

Financial analysts' opinions

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The global pandemic of the new coronavirus has made negative adjustments to the work of all industries. Some participants in business projects were forced to cease their activities altogether due to the impossibility of selling products due to closed borders.

The European currency has lost its value, as it rotates to a greater extent within the countries of the European Union. In addition, low volumes of hydrocarbon consumption (prices for them went down sharply) and an increase in settlements in dollars played a large role in the exchange rate adjustment.

According to experts, the creation of a fund for support and restoration of the EU countries can save the euro from falling. According to the forecasts of the French national bank, this is the only effective measure that will allow the economies of European countries to begin recovery from the pandemic.

The respected French financial conglomerate Societe Generale believes that it can give an accurate forecast for the euro exchange rate at the end of the second half of 2021. So, representatives of this financial association expect that the currency will cost from 1, 2 to 1, 3 $ per one euro in June 2021.

We can agree with this if we take into account that it is Societe Generale that is a globally significant bank that is highly respected by financial market analysts. The bank's specialists note:

1. The new fund will be able to maximally protect all participants in the industrial sector of European countries from a rapid economic decline.
2. It will be possible to achieve gradual economic growth without significant losses for producers and intermediaries of all levels.
3. With the help of the fund, owners of enterprises in the service sector will be able to change the direction of their activities or at the same time organize new work for the period of a pandemic.

In June 2021, according to experts from Societe Generale, there will be an increase in the difference in the rate of increase in the economic processes of the EU countries. That is why interest rates will differ. With this perspective, the euro will not rise or fall sharply. The Support and Recovery Fund will help and will not allow an undue negative impact on the European currency.

In the first half of the year, analysts said that in October-December, the eurozone countries will gradually begin to restore production and increase trade. The bets were made on the resumption of tourist flows, which is vital for many EU countries.

However, in October it became clear that the pandemic not only did not recede, but also resumed with renewed vigor. The leaders of European states, one after another, announce the introduction of restrictive measures and close their countries from external flows. Some states even restrict the movement of their citizens, they talk about a new lockdown.

What to wait

Of course, skeptical experts and analysts refuse to make predictions about what the euro exchange rate will be in June 2021. They are confident that a record drop is inevitable. After the newly introduced restrictions, many enterprises will close, others will not work at full capacity.

On this occasion, Christine Lagarde made a speech on October 29. She said that the growth prospects of European economies are questionable. In her opinion, the momentum of the recovery is declining faster than analysts predicted. And this, despite the insignificant, but still the growth of the economy during the three months of the summer.

Ms Lagarde stressed that short-term forecasts are showing negative results. There is no need to talk about what will happen to the European currency in the first half of 2021.

Restrictions in the service sector dealt a serious blow to the economies of the countries. This applies not only to the tourism sector.

Service at all levels is undergoing an incredible decline. Beauty salons, sports facilities are closed, catering establishments do not work. In addition, the level of investment in various sectors of the economy fell. This situation cannot but affect the rate of the European currency.

However, Lagarde confidently states that the monetary policy, which was adopted by the European central bank back in March 2020, helps maintain a positive outlook for the financial markets of the eurozone countries.

She emphasizes that the management of the financial institution carefully analyzes all information that can affect the change in the euro exchange rate and the slowdown in economic growth. If necessary, additional measures will be taken to support industry and business.

The volatility of the European currency is influenced by both external factors and the internal situation in each EU country. So, the influence can be exerted by:

• the dynamics of exchange rates in general at the world level;
• reliability of information on the development of the situation with the pandemic;
• the speed and prospects of developing and launching a vaccine into production.

The ECB will buy back assets. At the moment, the Pandemic Emergency Purchase program is running. This project is expected to be extended until the end of 2021. Depending on the situation with the coronavirus, and, as a result, with the economies of the Eurozone countries, the repurchased assets will be reinvested as needed. The program will work until the ECB decides that the crisis caused by the pandemic is declining or is completely over.

According to the Russian Agency for Forecasting the Economy, the euro exchange rate for June 2021 will be: maximum - 103, 58 rubles; minimum - 99.08 rubles.

Outcomes

The euro exchange rate in June 2021 will depend on the growth rate of the economies of not only the EU countries, but also the global economic situation. In addition, the situation with the coronavirus will seriously affect the rate of the European currency.