Euro May Edge Higher on ECB-Fed Divergence

The euro may experience a modest rise later this year if the European Central Bank (ECB) raises interest rates while the Federal Reserve keeps its rates unchanged, according to strategists at UniCredit's The Investment Institute.

In their baseline scenario, the ECB is expected to raise interest rates in September, whereas the Fed remains on hold. This divergence between the two central banks could lead to a modest euro-dollar rebound.

The strategists predict that any euro gains would be capped at $1.17, and the current price of $1.1372 may see some marginal increase as a result.