EUR to be a poor performer this year – Rabobank

FXStreet Insights Team FXStreet

The USD may be the worst performing G10 currency in the year to date, but the EUR is struggling to leverage significantly from the greenback’s softer tone. Measured since the start of February, the single currency is the second worst performing G10 currency after the USD, Rabobank's FX analyst Jane Foley notes.

EUR/USD struggles to hold on to breaks above the 1.05 level

"Although EUR/USD is trading comfortably off this year’s lows, it has struggled to hold on to breaks above the 1.05 level. A soft EUR is likely to be welcomed by European exporters. We continue to expect the EUR to be a poor performer this year."

"Although the USD’s weakness can be explained by a change in the market’s focus regarding the inflation and growth risks that face the US economy, the outlook for the EUR continues to be clouded by structural issues within the Eurozone that are hampering growth combined with fresh concerns about defence."

"The shift by US Presidential Trump on Ukraine and on European defence guarantees highlights Europe’s vulnerability on this front. We continue to see risk of EUR/USD moving lower into the middle of the year. That said, we favour selling EUR/JPY and look for a break of the EUR/JPY 155 level on a 1-to-3-month view."

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