This also explains the recent increase in EUR/USD. However, this trend is not expected to last, and analysts predict no sustained rise in the euro next year, including against the Romanian leu.
Analysts don’t expect a significant drop in the USD/RON rate. Given the current strength of the dollar, if the rate approaches 4.44, it could trigger a technical rebound, similar to what occurred a month ago. This will drive investors to buy dollars again in anticipation of a rise.
In the context of Romania’s presidential elections, analysts expect increased volatility for RON crosses but believe the long-term impact will be minimal.
iBanFirst estimates that the dollar index is currently overvalued by 9.3%, although this is still below the 1980s peak of over 20%. This overvaluation is likely to persist for the years to come.
For the last months of this year and well into 2025, the driving force of foreign exchange markets and the entire financial system will be the normalization of monetary policy in both the EU and the United States. As central banks make moves to adjust their policies, the effects will significantly shape market sentiment and investment strategies globally.
The Romanian presidential elections as well as the US presidential elections will have minimal long-term effects on the currency market. Other factors, including China’s economic trajectory, weak liquidity across market segments, and geopolitical developments in the Middle East, remain unpredictable and could influence the market.