We remain of the view that there is limited EUR downside from the current levels, mainly due to limited room of further rising ECB easing expectations.
This is especially true when considering that several central bank members criticize a more aggressive monetary policy stance.
According to ECB Executive Board member Lautenschlaeger the central bank should not undertake any further monetary stimulus measures for now as euro-area economy has so far shown to be resistant to uncertainty in the global economy. Even if her comments did not have any major currency impact yesterday, they still show that it will be difficult for Draghi to exceed already elevated easing expectations.
Our EUR/USD year-end forecast remains at 1.06.
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