EUR/USD: Scope for further downside pressure by year end – Rabobank
|Analysts at Rabobank explained that while there is scope for the US Dollar to soften in the near-term, they expect the greenback to retain a firm bias into year end. They have revised their 3 month forecasts for EUR/USD to 1.09 from a previous forecast of 1.10.
Key Quotes:
“The EUR remains one of the worst performing G10 currencies on a one month view and in light of the economic clouds over the German economy we expect the EUR to remain under pressure vs. the USD into the end of the year as optimism about what could be a mini-trade deal wears off.”
“While Draghi will soon be handing over the reins of the ECB Presidency to Lagarde it would appear that the Governing Council has already shown its hand. Attention will now turn back to the Fed and to reactions of US policy makers. The Fed is widely expected to cut rates at the September 19 FOMC meeting and, if this coincides with optimism about US/China trade talks the Fed may have some impact in weakening the USD near-term.”
“In our view the pace of Fed rate cut is unlikely to accelerate significantly until the H2 2020. For this reason we are not expecting EUR/USD to convincingly break its downtrend until next year. We expect EUR/USD to be trading in the 1.10 area on a 6 month view, before clambering back to around 1.15 in 12 months.”
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.