Bank of America Merrill Lynch analysts suggests that their constructive view on the EUR this year may need more time to play out as their estimates suggest that EUR/USD pair is undervalued by about 7 percent, primarily because of the USD overvaluation.

Key Quotes

“EUR is actually overvalued against GBP and JPY.”

“Mixed US data & a dovish Fed should have helped to bring EUR/USD back to equilibrium, between 1.20 &1.25, which is also our forecast range. But, Eurozone data remains very weak, ECB tone has turned dovish, and EUR remains very vulnerable to Brexit risks and trade tensions.”

“Still, our baseline scenario for global eco is consistent with a stronger EUR/USD in months ahead. It is not hard to argue that EUR/USD will appreciate following US-China & US-EU trade deals, a Brexit deal, & improvement in China data following recent policy stimulus EZ data has been surprisingly weak and could rebound in this scenario.”

“ECB could start talking again about rate normalization. A number of things have to go right for EUR/USD to strengthen, but we remain optimistic. It could just take more time than we've been expecting.”

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.

Feed news

Latest Forex News

Editors’ Picks

GBP/USD off 7-month highs, still firmer as Tories hold the lead

GBP/USD retraces from the new seven-month highs of 1.3180 but remains strongly bid, as weekend polls have reaffirmed a solid lead for PM Johnson's Conservatives. Cable dropped on Friday amid upbeat US data.

GBP/USD News

EUR/USD steadying above 1.1050 amid upbeat German export data

EUR/USD is trading above 1.1050, attempting a recovery after Germany reported an increase in exports in October. EUR/UDS dropped sharply on Friday amid upbeat US Non-Farm Payrolls and weak German industrial output. 

EUR/USD News

Forex Today: US-Sino trade tensions prevail, Boris closer to victory, EUR/USD licking its wounds

Trade talks: President Donald Trump has called on the World Bank to stop lending to China, a move that may aggravate tensions, with only six days to go until Washington is set to slap new tariffs on Beijing. Negotiations continue.

Read more

Gold clings to modest gains above $1460 level, lacks follow-through

The latest NFP report surpassed most optimistic estimates, which provided a goodish intraday lift to the US dollar and eventually prompted some aggressive selling around the dollar-denominated commodity.

Gold News

USD/JPY: tensions between Washington and Beijing back the JPY

Japanese Q3 Gross Domestic Product doubled the market’s expectations, up by 0.4%. The US calendar has nothing to offer today, attention focus on Washington-Beijing relationship. USD/JPY pressuring the post-NFP low, decline to accelerate once below 108.40.

USD/JPY News

Forex MAJORS

Cryptocurrencies

Signatures