LONDON, March 10 Deutsche Bank said on Tuesday
it expects the euro to fall to parity with the dollar as early
as the end of this year, and it forecast the single currency
would drop to just 85 cents per euro for 2017.
Germany's biggest bank, the world's second-largest currency
trader, had led the way last year in forecasting a devaluation
of the euro, saying it expected a huge outflow of investment
from Europe in the next two years.
But Deutsche analyst George Saravelos said the age of
"Euroglut" has progressed faster than he expected. In a
Euroglut, Europe's savings and the money brought in by Germany's
large trade surplus pile up and get exchanged for
"European outflows have been even bigger than our initial
expectations over the last six months," he wrote. "We now
foresee a move down (for the euro) to $1.00 by the end of the
year and a new cycle low of 85 cents by 2017."
Deutsche's previous forecast was for the euro to reach
parity by the end of next year and 95 cents in 2017.
Reuters polling as recently as last week showed most banks
expected the euro to fall to around $1.08 over the next 12
months. But a new bout of dollar buying since last Thursday has
since taken it as low as $1.06995.
(Reporting by Patrick Graham; Editing by Larry King)