Author, Andy Brown
Below you will find out whether the Euro to Dollar exchange rate is currently at good or bad levels and whether it’s likely to go up or down from here. Exchange rate forecasts can help inform your decision of when to transfer Euros to Dollars.
Is it a good time to buy Dollars with Euros?
Buyers of Dollars want a high Euro to Dollar exchange rate. The higher the rate, the more Dollars you get per Euro.
To understand whether the current Dollar to Euro exchange rate is good or bad, it’s best to compare it to recent historical data.
At the moment, the Euro to Dollar rate is trending near the lower end of its 5-year trading range.
Over the last 5 years, the Euro’s high point was 1.2489 in February 2018 and dropped as low as 1.0411 in May 2022 due to the conflict in Ukraine.
The EUR/USD rate is expected to trade between 1.03 and 1.07 during the second half of 2022.
It is likely that the Euro will continue to struggle and trade around the 5-year low mark if the conflict in Ukraine is not resolved.
On the other hand, the US Dollar has a status as a safe-haven currency. As a result, it has strengthened since the start of the conflict in Ukraine.
The US economy is also in a strong position to weather rising inflation compared to other global economies.
Compared to historical exchange rates, it is not the best time to make a Euros to Dollars transfer.
However, exchange rates often get worse before they get better, so it may pay to make a transfer sooner rather than later.
Is it a good time to buy Dollars with Euros?
The strength of the Euro throughout 2022 will depend on a few main factors, including:
– The prospect of peace between Russia and Ukraine
– The way the European Central Bank addresses the issue of rising inflation
– The economic strength of European countries compared to the United States
These are the three main factors that are currently having a significant impact on the strength of the Euro relative to the US Dollar.
Should the current trend continue, the Euro to Dollar rate will likely hover around the lower end of the historical trading range, or even decline further.
However, unexpected events can cause exchange rates to take a sudden dip or rise.
No exchange rates forecast is ever a prediction of absolute certainty.
Analysts often present their forecasts as the ‘base case’. They are the most accurate expectation of future exchange rates, should nothing unforeseen happen.
Unexpected major events like the 2008 financial crisis, the Covid-19 pandemic and the Ukraine war are known as ‘black swan’ events.
These can significantly affect exchange rates and cause dramatic spikes.
Exchange rate forecasts aim to make the best possible predictions with the data available and what can reasonably be expected.
Euro to Dollar Forecast Poll (1 week, 1 month, 1 quarter)
All exchange rate forecasts are just someone’s opinion.
One person’s opinion can easily differ from another’s. And it would take a miracle for someone to be correct 100% of the time.
I often use FX Street to get an accurate snapshot of opinions over multiple time frames, which shows you forecasts from different analysts.
Here you can see the views of 38 analysts over 1 week, 1 month and 1 quarter forecasts.
In this Euro to Dollar forecast, ‘bullish’ means it’s expected to be good for the Dollar, and ‘bearish’ means it’s expected to be good for the Euro.
In the short term, most analysts keep their predictions close to the status quo.
It takes a brave analyst to risk being different from the majority.
But there will always be slight differences of opinion.
This is why a collection of expert opinions can give you a good gauge of market feeling and help you understand what could be most likely to happen.
Euro to Dollar Forecast Weekly – a common-sense approach
In the short term, over say a week or so, there aren’t that many things that can change.
For that reason, short term predictions can reflect the current trend, rather than a definite prediction of what experts think will happen.
If you look at an economic calendar, you can see the upcoming events that may affect the Euro to Dollar exchange rate.
I often use DailyFX Economic Calendar to see what’s upcoming in the finance world.
You can filter the countries you’re interested in and whether events are of low, medium or high importance.
If a significant event is scheduled to happen soon, it could be an opportunity to take advantage of a potential spike in your favour. Or it could be time to act before the exchange rate moves against you.
Remember though, all exchange rate forecasts are still opinions, and no event guarantees that the rate will move in the direction you think.
This is why I would suggest avoiding being too greedy.
If the current rate isn’t currently in your favour, it’s easy to get sucked into hoping the market will make positive moves in the long term.
The market can just as quickly run away with itself in the wrong direction.
Focus on the short term and move when the market makes short-term gains.
If you don’t feel comfortable assessing market forecasts yourself, why not speak to one of our currency exchange representatives?
An important part of our service is to offer assistance and help you talk through your transfer.
So many money transfer companies make you manage the transfer entirely, using an online app.
That’s not the way we do things.
Our representatives take the time to understand why you’re making your transfer and find the best time for you to make it.
They can give you an indication of what could affect the exchange rate in the short and medium-term.
This can make your decision far easier when making the transfer.
Euro to Dollar Forecast next 6 months – practical advice
When you look at a forecast over a longer period, it increases the likelihood of a more dramatic movement in the Euro to Dollar exchange rate.
In a week, a 1% swing in exchange rates is considered a large movement. Over 6 months though, a 5% swing is not uncommon.
Simply put, there’s more time when significant events can happen to affect the strength of the Euro and Dollar.
With this in mind, when should you transfer your money?
I’d recommend making the transfer at a time in the near future when the rate moves in your favour.
This sounds simple – but it’s often best not to overcomplicate your transfer.
Don’t fall into the trap of waiting months for the perfect exchange rate to magically appear, only to be forced to make the transfer at a lower exchange rate.
The typical reasoning for waiting that people regularly say to us is:
“The Dollar is getting stronger; I’ll wait for it to go up further.”
“The Dollar is getting weaker; I’ll wait for it to recover.
It’s easy to think you’ll find the absolute perfect time to make your currency transfer.
With that mindset, sadly the perfect time often passes people by.
Of course, timing matters.
To find a good time to make the transfer, you can use historical exchange rates as a guide.
While looking at historical Euro to Dollar exchange rate charts, I would start by asking these questions:
- When did the exchange rate last trade at current levels?
- How high or low is the exchange rate compared to the last 5 years?
- How long has the current trend in the exchange rate been running?
Answering these questions will give you a good indication of whether now is a good time to make your currency transfer.
At Key Currency, you can ask these questions directly to a currency exchange expert who can offer insight and help you find the best time for you to make your transfer.
They watch the currency markets closely to spot trends and help clients save money on their international money transfers every day.
Need guidance on exchange rates?
We’ve all got busy lives, and for most of us, the currency market isn’t something we have time to watch full-time.
That’s why it can often pay to speak to a currency exchange expert.
These days, most money transfer companies want you to conduct the entire transfer by yourself.
No support, no guidance, and no help.
We think a large money transfer is best done with one-to-one guidance.
If you make the transfer at the wrong time, it could potentially cost you thousands.
And you want to make sure all the international payment details are correct.
Why take any chances?
Surely it’s worth taking the time to talk your transfer through with someone who is an expert in the field?
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Key Currency is regulated by the FCA as an Authorised Payment Institution (No. 753989). As such, all money transfers are conducted through safeguarded client accounts.
To compare our rates, or discuss your Euro to Dollar transfer, just get a free quote.