EUR/USD: Choppy? - Rabobank

Jane Foley, senior FX strategist at Rabobank, expects EUR to face difficulty in gaining traction vs. the USD in the months ahead because of the current downside risks to Eurozone growth and the political issues risks stemming from trade wars in addition to the European parliamentary elections.

Key Quotes

“It is our view that the Fed funds rate has probably already reached its peak for this cycle.  As this change in outlook impacted market positioning, EUR/USD trended higher from a low of around 1.1216 in November to around 1.1570 in early January.  Insofar as the market is no longer priced for further progressive tightening from the Fed, it stands to reason that the USD will benefits from better than expected US economic data.  It is also likely that the EUR/USD cross rate may be more vulnerable from poor news stemming from the Eurozone.”

“Having reached a high in the region of EUR/USD1.1570 in early January, the EUR has subsequently been undermined by weaker than expected Eurozone economic data.”

“The potential for political headwinds in the Eurozone this spring suggests there is scope for EUR/USD to push lower on a 3 to 6 month view. The market, however, will have to play this risk against the concern that the US economy could be showing more signs of slowing down as this year progresses.  While we continue to see scope that EUR/USD could see the 1.12 area again on a 3 to 6 month view, we maintain our view that the months ahead could bring plenty of opportunity for a sparring contest between the EUR and the USD with the cross rate potentially caught in choppy ranges for weeks at a time.”

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

EUR/USD steady around 1.1240 in ultra-thin holiday's trading

The EUR/USD pair bounced some 20 pips from its weekly low during the Asian session, now mute around 1.1240 with most market's off today. Softer-than-expected US housing data passed unnoticed.


GBP/USD battling around 1.3000

The GBP/USD pair is heading nowhere fast after bottoming for the week at 1.2978, amid lack of progress in Brexit negotiations.  Encouraging UK data failed to trigger Pound's demand.


USD/JPY: On track to close in the middle of its 50-pip weekly range below 112

The USD/JPY pair remains frozen below the 112 handle in the NA session and there is no reason for it to make a meaningful move as investors are already enjoying the Easter holiday.


The Tale of the Prosperous Consumer-US Retail Sales

American consumers asserted the right to spend in a grand fashion in March boosting retail sales to the fastest expansion in 18 months as the booming job market put the shutdown marked holiday season to rest.

Read more

Gold Forecast: Eyes 8-month rising trendline after weakest weekly close since December

The troy ounce of the precious metal lost around $17 this week and now looks to record its lowest weekly close since the end of December near $1275.

Gold News