Still, the euro is not out of the political volatility woods just yet. Later this year, Germany and Italy, the Eurozone’s largest and third-largest economies, hold national elections.

Political uncertainty continues to linger in Italy as well. Former Prime Minister Matteo Renzi resigned in December following a no-confidence referendum. At the time, some market observers believed Renzi’s resignation could lead to early elections and a rise in support for the populist anti-euro Five Star Movement. The party would seek to carry out a referendum on Italy breaking away from the Euro area.

Thanos Vamvakidis, head of global G-10 foreign-exchange strategy at Bank of America Merrill Lynch “said his outlook for the euro is mixed because the U.S. Federal Reserve is expected to raise interest rates, which would drive the dollar higher. But the U.S., along with the U.K., has had the most negative economic surprises of any economy, while Europe has had the most positive economic surprises,” reports CNBC.

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