The multiple factors underpinning the renewed strength of the euro against the dollar

BNP Paribas attributes the euro's renewed strength against the dollar to a return to current account surplus and a narrowing one-year interest rate gap with the U.S. The bank expects the Fed to end its tightening cycle before the ECB and says the euro remains well below its long-term fair value. It also flags that unhedged dollar positions could amplify dollar selling.