EUR/USD: Downside risk keep the focus on 1.0000 – Danske Bank

Matías Salord FXStreet

The current environment with economic growth slowing down is favorable to the US dollar according to analysts from Danske Bank. They forecast the EUR/USD pair at 1.04 in a one-month perspective, at 1.03 in three months and at 1.00 in a year.

Key Quotes:

“Fundamentally, the US should continue to be a high(er) interest rate market and equities continue to appeal to foreign investors. This means the US is likely to attract capital, which helps the USD.”

“The large negative terms-of-trade shock to Europe vs US, a further cyclical weakening among trading partners, the coordinated tightening of global financial conditions, broadening USD strength and downside risk to the euro area make us keep our focus on EUR/USD moving still lower (targeting 1.00) – a view not shared by consensus.”

“The key risk to shift EUR/USD towards 1.15 is seeing global inflation pressures fade and industrial production increase. The upside risk also include a renewed focus on easing Chinese credit policy and a global capex uptick but neither appear to be materialising, at present.”

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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