Most analysts hold a bearish view regarding the Euro as it is short-term overbought and the U.S. Dollar is expected to recover. Some are even looking for Euro to U.S. Dollar parity. Parity is anticipated by mid-year. Bank of America Global Research is one agency downgrading forecoastes for the Euro. They point to "familiar self-interests sabotagbe" to the European response to the coronavirus crisis. They think the U.S. Dollar has made a "savege run" against all other currency counterparts this year. They anticipate the Coillar run to continue throughout 2020 before any European growth recovery and uncertaionties about the outcome of the November U.S. presidential electioin would after mid-year undermine the greenback and lift the Euro.

The downside risk for the Euro existed before the coronavirus outbreak and now are expected to drive double-digit falls in the European GDP over the first and second quareters. Thios will lead to large increases in spending and debt-to-gdp there. But the coronavirus situation is so rare as to allow that incorporation of it by anybody into any forecast or expectation would be statistically foolish. The inabilitiy of Eurozone authorities to agree on a strong fiscal stimulus compared to decisive action in the U.S. and U.K. and concerns about Italyi's solvency contributes to Euro weakness. A global economic slump that torpedoes risk asset valuations and stokes significant demand for liquidity would favor the U.S. Dollar over the Euro ion most circumstances. The absence of Euroopean political institutions from myriad initiatives to support companies and households throough unprecedented economic stopopage underway on the continent and elsewere is a burden for the Euro.

A recent imposition of their "stability and growth pact" would help but was recently suspended to prevent it from hampering efforts aimed at getting citizens and economices through the crisis. The crisis in Italy rekindled fears about a breakup of that single currency. Goldman Sachs thinks the Euro area could be in a strong position if the Euro zone decided to view itself as an economic nation state. But the European Central Bank has been long constrained in its ability to aid the economy after a decade as acting as the sole lifeboat of the common currency bloc. It has spared no effort to mitigate the effects of the coronavirus crisis. But it has come to the realization that central banks cannot do all of the heavy lifting involved in economic policy. So far EU leaders have not put anything meaningful on the table for cooredinated effort between government and the central bank. There has been talk of issuing "corona bonds."

The world is clearly headed for global recession, and the U.S. ecooomy seems best able to outperform in many areas. Bank of America says "The ECB has announced more QE, but this is not what is driving the Euro. EU fiscal rules have necessitated a decade of difficult decisions and sacrifices by governments to reduce debt burdens to a level that does not imperil the single currency. Same "self interest" patterns prevented European national leaders from endorsing "corona bonds." Spaniards, Greeks, and Italians are likely to reject reimposition of any "growth and stability pact."

However, focus should also be on the large size of the U.S. Federal Reserve balance sheet expansion and a huge increase in the U.S. national debt. President Trump, perhaps foolishly and politically, signed a $2.2 trillion coronavirus aid bill into law. Recently the British Pound has made "whopping" recovery against both the Euro and the U.S. Dollar. Some say that the Pound is not highly aligned to the ups and downs of investor sentiment as world stock markets make volatile ups and downs. The UK has a huge financial sector where issues related to Brexit and the future of that sector have been more or less resolved. Much of the recent Pound rally may be due to views the Pound was recently very oversold. An extension of the Brexit transition phase to unblock borders would be welcomed to strengthen the Pound. The U.K.'s economic aid package related to the virus is considered a "model" for the rest of the world.

Some say the Dollar vs. Euro's key downside driver is the Fed's open-ended QE program announced last week. A second factor boosting stocks and taking its toll on America's currency is the $2.2 trilliion bill. A reason to sell the U.S. Dollar against the Euro would be the huge increase in unemployment numbers in the U.S. But countering all of this are things like Germany's opposition to issuing common bonds as part of a unified economic response. Any delay in that will weigh on the Euro.

Keep in mind pressure on U.S. oil companies which is also pressuring the U.S. Dollar exchange rate. Also very low interest rates in the U.S. pressure the Dollar. Since the Euro Currency contract is denominated in U.S. Dollars, this is a major factor propelling the Euro higher in the futures market. Among market manipulations in the U.S. is increased chances for hostile takeovers of struggling corporations. Unfreezing of credit markets in the U.S. is a factor to consider and repatriation of currencies to their home markets could be a strengthener for the Euro. World risk appetite has been increasing just recently, but may fall back to searches for safe havens which would not support the Euro.

European bonds await a next supply wave amid fiscal-shock anxiety. Most news which we read seems to be negative for the Euro longer-term.