Euro Forecast: Currency to Fall as Economists Suggest it May be Overvalued

Euro Forecast: Currency to Fall as Economists Suggest it May be Overvalued

The euro may fall below $1.40 after recent gains made it close to 20 percent overvalued in terms of purchasing power, according to Mizuho Corporate Bank Ltd.

The CHART OF THE DAY shows how much euro-dollar exchange rates have deviated from purchasing power parity, a measure of the cost of goods relative to other countries, in the past 10 years. The euro reached $1.4520 on April 12, the highest since Jan. 14 last year and widening the difference from purchasing power to about 18 percent.

Source: Euro Forecast: Currency to Fall as Economists Suggest it May be Overvalued