EUR/USD: What will it take to get out of the recent 1.12-1.16 range? – Danske Bank
|In opinion of analysts at Danske Bank, Fed’s soft signals from both the need for the balance-sheet run-off to be revisited and questioning of the need for more hikes have kept USD on the defensive.
Key Quotes
“What will it take to bring EUR/USD out of the recent 1.12-1.16 range that has prevailed since early autumn? While difficult to envisage USD significantly stronger given the end of the US hiking cycle being near and stretched USD valuation, we are unlikely to see a sustained break higher without a trade deal and or euro-zone cyclical stabilisation.”
“We expect the cycle to favour USD for now though. Further, news in today’s minutes on whether ECB is seeing a monetary policy need for liquidity injections could be a signal that the first hike may be further postponed and thus matter for EUR. We remain doubtful regarding a new TLTRO and hence do not think EUR downside from this factor is imminent.”
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.