Organization: Cautiously optimistic outlook for the euro.

Francesca Fornasari of Insight Investment stated in a report that the outlook for the euro remains cautiously optimistic, although gains may be limited. The main driver of the euro's strength in February was the general weakness of the US dollar, rather than strong improvements in the eurozone fundamentals. The currency business director noted that in the face of uncertainty in US policy, the euro sometimes behaves "like a relatively safe haven asset". The possibility of unexpected monetary policy changes is limited, given the modest growth outlook and inflation continuing to fall towards the European Central Bank's target, "which reinforces the market's expectation of a gradual and well-communicated easing cycle by the ECB". This provides support for the euro on a relative basis, especially compared to currencies facing deeper domestic imbalances. However, she mentioned that energy issues remain a major weakness for the euro. The euro fell by 0.1% to $1.1529.