Investing.com - The euro continues to depreciate, one step closer to parity with the U.S. dollar, amid concerns over European energy supplies and a recession. On Monday, the US dollar index rushed to 108, continuing to hit a new high since October 2002, while the euro fell to a 20-year low, with the narrowest difference between the euro and the dollar being only about 30 points.
Shorting the euro was already one of the most popular trades among Wall Street FX professionals last week. Compared with other major currencies, the euro's position was the largest weekly change, with the net short account position increasing by $769 million, taking the total to 22 percent, Scotiabank strategists Shaun Osborne and Juan Manuel Herrera Betancourt wrote in a Monday report. billion, the highest level since the end of November last year.
George Saravelos, global head of foreign exchange research at Deutsche Bank, said in an interview on Monday that he thinks the euro is on the verge of falling below parity, especially with the complete shutdown of the Nord Stream 1 pipeline. He expects the euro to trade in a 0.95-to-par range.
Citigroup analyst Tom Fitzpatrick advised investors to go all out against the euro against the dollar, and priced euro-dollar put options at 0.95.
However, some analysts hold a different view. Brad Bechtel, currency strategist at Jefferies LLC, said the euro is oversold against the dollar by many technical indicators, and parity is the goal of many market players, but I would not be surprised if there is a short-term rebound.