Investing.com -- The euro edged slightly higher on Monday, slamming the brakes on its rapid depreciation against the U.S. dollar ahead of a highly-anticipated Federal Reserve meeting later this week.
EUR/USD gained 0.70% or 0.0073 to 1.0569 in U.S. afternoon trading. The pair fell below 1.05 at last week's close, as the start of the European Central Bank's €60 billion a month quantitative easing program coincided with expectations of an interest rate hike from the Fed. Since the start of the year, the pair is down roughly 10%.
Last week analysts from Deutsche Bank (XETRA:DBKGn) and Goldman Sachs (NYSE:GS) both revised their timetables on when the euro could reach parity against the dollar, moving up the dates from previous forecasts. Deutsche Bank even predicted that the euro could fall to 0.85 against the dollar by 2017. On Monday, Alan Ruskin head of foreign exchange strategy for Deutsche Bank, went one step further.
Speaking with CNBC's Power Lunch, Ruskin said he thinks it is possible the euro could reach a historic low against the dollar of 0.82. The euro hasn't reached a level that low since 2002.
"If you think of what's driving the euro, a lot of this has been hedging from foreigners who've held euro bonds and euro equities," Ruskin told CNBC. "I think that it will slow somewhere near parity."
The Fed could remove its reference to "remaining patient," from its minutes when the Federal Open Market Committee stages a two-day meeting this week, beginning on Wednesday. The reference typically indicates that it will start raising interest rates at either of its next two meetings. It has been six years since the U.S. central bank has increased rates, which have remained near zero since the Financial Crisis.
Elsewhere, Greece and its euro zone creditors appeared to be far apart in negotiations concerning the reform measures Athens must employ to extend a critical bailout package. Greece prime minister Alexis Tsipras appears unwilling to agree to some of the austerity measures required by the euro zone in order to strike a deal.
"Whatever obstacles we may encounter in our negotiating effort, we will not return to the policies of austerity," Tsipras told Greece newspaper Ethnos.