EUR/USD to move downward through the next year – SocGen
|July was the euro’s smallest monthly range ever. EUR/USD is set to stick to its 1.16-1.20 range for the rest of 2021. But US inflation worries and European growth concerns would be a pretty toxic mix for the euro next year, Kit Juckes, Chief Global FX Strategist at Société Générale, reports.
See – Germany: EUR/USD to race higher only on a major election surprise – Danske Bank
The eventual move is down
“The biggest theme for market overall is concern that labour shortages and supply bottle-necks will not only boost inflation but hurt economic activity. The more that is a worry (and this week’s JOLTS data didn’t help in this regard) the more it supports the dollar.”
“We still expect EUR/USD to remain stuck in a 1.16-1.20 range for the rest of the year before heading lower.”
“This week I wonder if a break of 1.18 can trigger further weakness after the ECB meeting.”
“The ECB might take as long as the BoOJ to reverse rate cuts. The Fed however, is on track to escape the zero bound, even if not until 2023.”
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