Currency traders, bullish on the euro, are seeing their patience rewarded. The single currency crossed the $1.20 mark during the session, a first for more than two years.

The euro has risen more than 10% since the end of March, when the coronavirus pandemic shook the markets. The European Union's policy response to the crisis supported the single currency, while the US Federal Reserve's decision to cut rates close to zero and inject huge amounts of liquidity weighed on the dollar. Last week, the Fed announced a policy change that should keep interest rates lower for longer. What put more pressure on the greenback.

"The US money supply expansion and the Fed's quantitative easing, as well as the US deficits are all negative for the dollar and benefit the euro, especially in light of the next generation European fund," says to 'Bloomberg' Shyam Devani, strategist at SAV Markets in Singapore. "I expect a big rally in EUR/USD with long-term resistance levels just below 1.21, beyond that we could be looking towards 1.25."

“The dollar continues to evolve as a safe haven and depreciates with the increase in risk appetite,” said Esther Reichelt, analyst at Commerzbank.

"We believe Fed policy will remain accommodative for as long as it takes to bring inflation back to its target level, 'on average'," PIMCO analysts said. "Given that we expect full employment not to return until mid-2024, this would put the Fed on course for a multi-year period of very low policy rates and asset purchases," the analysts said. experts at the asset management giant, while adding that continued uncertainty over the coronavirus pandemic would limit the dollar's decline.