Western analysts: Euro devaluation expected

Azerbaijan, Baku, June 30 / Trend A.Badalova /

Following a slight recovery, the euro fell 0.7 percent against the dollar to $1.2284 this week. Concerns about the economy in the euro space are the primary factor in the currency's drop.

Western analysts do not believe the euro will grow significantly in the short term.

Economic Research Capital Economics predicts the dollar rate against the euro hitting $1.10 per euro by late 2010. The company does not exclude the possibility of a parity drop in the euro in summer 2011.

Analysts predict the euro's rate against the dollar at $1.25 following the second quarter of 2010 and $1.15 in the third quarter.

Analysts at one of the largest U.S. investment banks, Morgan Stanley, forecast the dollar's rate against the euro at $1.16 by late 2010 compared to the $1.24 per euro forecast earlier. According to analysts the European currency will fall to $1.12 in the first quarter of 2011.

The British bank Barclays expects the euro's rate against the dollar to reach $1.25 by late 2010.

Meanwhile, the U.S. JPMorgan expects the euro's rate against the dollar to hit $1.25 in the second half of 2010. In late 2011, analysts expect the dollar's further appreciation amid expectations of an increased U.S. Federal Reserve discount rate.

Short-Term Forecasts on the Dollar's Rate Against Euro ($ / 1 €):

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