EUR/USD: Next trigger for a continued rebound will be a US–China trade deal - Danske Bank
|Analysts from Danske Bank, forecast EUR/USD will move higher during 2019. They see the US-China trade deal as a trigger to the upside.
Key Quotes:
“If the eurozone outlook continues to deteriorate, the ECB will have to postpone the first hike further. This could happen in the absence of a trade deal near term and/or a no-deal Brexit.”
“Carry momentum for USD is fading on the back of Fed’s soft rhetoric, and even if another rate hike or two may be in the cards, we do not think this will be a major source of dollar support. We have for long been arguing that the next big move in EUR/USD is higher as monetary-policy divergence fades and the cross is undervalued. While a Fed that is now effectively on hold has been the first stage, we think the next trigger for a continued rebound will be a US–China trade deal: this should benefit the open and China-dependent eurozone economy (EUR positive). Whether the ECB will fuel a third stage in this rebound remains an open question, but a first hike looms as a key EUR-supportive factor.”
“For now, 1.15 should act as an attractor for the cross. We have left our forecast profile unchanged and continue to see EUR/USD at 1.15 in 1M, 1.17 in 3M, 1.20 in 6M and 1.25 in 12M.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.