As the US prepares to welcome former President Trump back to the White House, the foreign exchange market is also preparing for a rare event: the euro reached parity with the US dollar. Strategists at banks such as Bank of New York Mellon and Mizuho believe that the parity between the euro and the US dollar may occur after Trump's inauguration later this month. EUR/USD has declined by more than 7% since the end of September, hitting its lowest level of 1.0226 in more than two years last week. The options market shows that EUR/USD is about 40% likely to hit parity this quarter. Options contract trading aimed at this level soared last week. The market is watching the situation after Trump was sworn in on January 20 to find potential catalysts. Bank of New York Mellon and Mizuho expect Europe to fall victim to a potential trade war, and the divergent growth prospects between Europe and the US may bring about a strength in the US that has rarely been strong in the past 20 years. Both banks mentioned above expect parity prices to appear as soon as this month.

As the US prepares to welcome former President Trump back to the White House, the foreign exchange market is also preparing for a rare event: the euro reached parity with the US dollar. Strategists at banks such as Bank of New York Mellon and Mizuho believe that the parity between the euro and the US dollar may occur after Trump's inauguration later this month. EUR/USD has declined by more than 7% since the end of September, hitting its lowest level of 1.0226 in more than two years last week. The options market shows that EUR/USD is about 40% likely to hit parity this quarter. Options contract trading aimed at this level soared last week. The market is watching the situation after Trump was sworn in on January 20 to find potential catalysts. Bank of New York Mellon and Mizuho expect Europe to fall victim to a potential trade war, and the divergent growth prospects between Europe and the US may bring about a strength in the US that has rarely been strong in the past 20 years. Both banks mentioned above expect parity prices to appear as soon as this month.