Flickr / SiskoThe euro is trading just a tad above $1.28 today.
However, Morgan Stanley’s Hans Redeker warns that it could eventually fall to parity with the U.S. dollar. This was reported by Bloomberg’s Candice Zachariahs.
“This policy concerning Cyprus, people will be getting more concerned in funding the peripheral, providing deposits there,” Redeker said. “The long-term implication is that monetary transition in Europe is not working, there’s no credit, no growth, and fiscal policy is still fragmented. So, therefore, you need to be fairly pessimistic for the outlook.”
“Within 2 1/2 years or so, you could be very close to parity, so the risk of an undershoot is quite significant,” he said.
Morgan Stanley’s currency team recently turned bullish on the dollar.
Here’s a long-term look at the euro priced in dollars via FinViz:
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