The Euro Continued To Decline, Or Back To Normal Levels.

The euro's downward trend is still continuing. Despite a rebound in the previous trading day, investors were once again overshadowed by the European debt crisis during the 28 Asian trading session. However, the European Central Bank Management Committee member Noah 27 said that the euro has recovered to a "more normal" level in recent weeks, and this is a major positive for the export of the euro area.

At 14:16 on the 28 th of Beijing time, the euro exchange rate against the US dollar was 1.2326 dollars, or 0.32%, and the euro yen exchange rate was 112.3200 yen, or 0.05%. The euro has fallen by about 14% this year, hitting a 4 year low of $1.2144 in May 19th.

Analysts believe that because the market is still worried that the European debt crisis will lead to tighter financial regulation, this reduces the demand for high-yield assets including the euro. "With the spread of the crisis from Greece to Spain and Portugal, the negative trend of the euro has not changed," said Zhang Futian, director of the senior marketing department at PRIME Forex firm. "EU managers can not solve this problem in one day or two days, and investors can't buy back the euro in large quantities."

The three month dollar London Interbank Offered Rate (Libor) hit a 10 month high this week. In addition, the ECB data released in May 21st showed that in March, the investment attracted by eurozone bonds decreased by 6.7%. All this shows that the market is speculated that the credibility of financial institutions is deteriorating due to the impact of the European sovereign debt crisis.

However, Noah, who is also the president of the French central bank, said 27, that the current level of the euro is close to its long-term average and beneficial to the export of the euro area. Data from the European Central Bank showed that the euro zone's exports to the US surged 24.5% in March, the highest monthly increase since the euro was launched in 1999.

Charles Wyplosz, head of the international monetary and banking research center in Geneva, also said that the devaluation of the euro is a good thing for the region, because other parts of the world are expanding, which will help the euro zone out of recession. He believes that the long-term fair value of the euro against the US dollar should be between $1.1 and $1.2. But Wyplosz also believes that currency fluctuations tend to overdo, so the euro will continue to fall further before it can pick up.

Swiss banks, Danish banks, Royal Bank of Scotland and Bank of America Merrill Lynch also share similar views. They all estimate that the euro will depreciate to US $1.15 to $1.26 by the end of the year. The Bank of Paris in France has said that the euro exchange rate will fall below 1 dollars in the first quarter of next year. According to Bloomberg data, purchasing power parity shows that the euro is still overvalued by more than 8% against the US dollar.