The dollar plays all in

The rapid rise of the inspired by victory of Donald Trump US dollar revived the idea of ​​its parity with the euro. Traders have increased the probability of such an outcome to 45%, even though a week earlier it was estimated at two times lower. Deutsche Bank recalls that when the EUR/USD pair for the last time came out of a long consolidation range, it quotes changed by 10% over the next few weeks and expects them to decline to 1.05 by the end of 2016 and to 0,95 by the end of 2017. The main driver appears divergence in the monetary policy of the ECB and the Fed.
Indeed, comments from the Federal Reserve are "hawkish" in nature, allowing the derivatives market to increase the likelihood of tighter monetary policy in 2016 to 86%. Thus, according to the head of the Federal Reserve Bank of Richmond Jeffrey Lacker, the stimulating policy of the new president of the United States is able to force the Fed aggressively raise the federal funds rate. Trump plans to spend on infrastructure around $0.5-1 trillion and according to research by BofA Merrill Lynch, fiscal stimulus of 1% of GDP would lead to an increase in the yield on 10-year treasury bonds by 48 bp. In terms of the interest rate differential of US and German debt markets, EUR/USD should have been already traded in the parity area.