The euro has defied almost all expectations since the Federal Reserve hiked interest rates for the first time in nearly nine years back in December. However, opinions among foreign exchange strategists are divided on what to expect from the euro in the coming weeks and months.

Before December, expectations of further monetary stimulus from the European Central Bank and an increasingly hawkish Fed had driven the euro close toward parity with the U.S. dollar, a level it hasn't seen since 2002. At the time, the two central bank's divergent monetary policies meant parity looked only a matter of time.

Against all expectations, the euro rallied sharply against the U.S. dollar in December when the Fed raised rates by 0.25%, finishing the month nearly 300 points higher than where it began. As the new year rolled in, growing doubts over the ECB's remaining capacity for further easing and an increasingly uncertain outlook for U.S. economy have pushed the euro even higher.

In early London trading on Friday, the eurozone currency bought $1.1308, up 4.1% since the start of the year. 

Now, with the eurozone economy having shown signs of recovery in the first half of the year, the prospect of further stimulus from the ECB to weaken the currency has diminished. In addition, a poor non-farm payrolls report in the U.S. for the month of May has left markets suffering from a new sense of unease over the likely health of the US economy.

BNP Paribas' Daniel Katzive, who is head of North American foreign exchange strategy at the French bank, noted that May jobs numbers from the U.S. have now diminished the significance of the June FOMC meeting.

He expects that Yellen and fellow policymakers will wait to see whether weaker jobs numbers are part of a broader trend, before hiking rates again. Against this backdrop, he predicts that the euro could rise by nearly 300 points, to reach as high as $1.1600 in the coming weeks.

However, foreign exchange strategists at Danske Bank disagree. Analyst Thomas Harr said that the risks were "to the downside" for euro against the dollar when updating his monthly forecasts at the end of May.

He warned that Brexit risks could weigh on the euro against the dollar  in the short term and that eventually, the prospect of a growing gap between interest rates in the U.S. and the eurozone would make it harder for the currency pair to move higher.  (The outcome of the U.K.'s referendum on whether to stay in the European Union will be known on June 24). 

And Morgan Stanley analysts Hans Redeker and Charles Rubenfeld this week cited a healthy 2.5% pace of U.S. wage growth in May as one reason to believe that the U.S economy could be stronger than previously thought. They predicted that the dollar bull market still has further to run - which doesn't bode well for those hoping to see the euro-us dollar rally continue. 

See full coverage on the Fed's upcoming interest-rate decisions.

More from Opinion

How to Avoid Investing in a John Schnatter: Dumbest Thing on Wall Street

How to Avoid Investing in a John Schnatter: Dumbest Thing on Wall Street

Microsoft Pops on Strong Earnings and Guidance: 8 Key Takeaways

Microsoft Pops on Strong Earnings and Guidance: 8 Key Takeaways

Microsoft's Earnings Provide Fresh Proof That the LinkedIn Deal Is Paying Off

Microsoft's Earnings Provide Fresh Proof That the LinkedIn Deal Is Paying Off

Bitcoin Prices Are Back Up, but Traditional Investors Remain Skeptical

Bitcoin Prices Are Back Up, but Traditional Investors Remain Skeptical

EBay's Soft Guidance Doesn't Reflect Well on its Attempts to Fight Off Amazon

EBay's Soft Guidance Doesn't Reflect Well on its Attempts to Fight Off Amazon