HSBC analysts said in the report that according to the bank's model estimates, the current exchange rate of the euro to the US dollar is undervalued. “The euro's rebound was less than the path level predicted by the model,” they noted. Analysts said that the model shows that some of the key components of the US dollar index, which measures the exchange rate of the US dollar against a basket of trade-weighted currencies, are currently undervalued, and the euro is particularly obvious. Meanwhile, the US dollar “may be slightly overvalued in relation to its historical drivers.” Analysts also mentioned that the euro exchange rate is usually driven by dollar trends and interest rate spreads, but recently there has been an unusual situation — stock indices have become an important driver affecting the euro exchange rate.

HSBC analysts said in the report that according to the bank's model estimates, the current exchange rate of the euro to the US dollar is undervalued. “The euro's rebound was less than the path level predicted by the model,” they noted. Analysts said that the model shows that some of the key components of the US dollar index, which measures the exchange rate of the US dollar against a basket of trade-weighted currencies, are currently undervalued, and the euro is particularly obvious. Meanwhile, the US dollar “may be slightly overvalued in relation to its historical drivers.” Analysts also mentioned that the euro exchange rate is usually driven by dollar trends and interest rate spreads, but recently there has been an unusual situation — stock indices have become an important driver affecting the euro exchange rate.