EUR/USD: Euro to stay weaker for longer in a 1.09-1.14 average range – Citi

FXStreet Insights Team FXStreet

The Euro faces multiple headwinds. Economists at Citi expect the EUR/USD pair to stay in a 1.09-1.14 average range.

ECB is expected to hike rates to 2.5%

“The single currency zone faces an unfavorable mix of lower growth, high inflation and rising rates in the months ahead.”

“The ECB is expected to hike rates to 2.5% amid fears of a severe winter’s effect on energy consumption, China’s delayed recovery and likely recession in Europe. These forces suggest the Euro staying weaker for longer in a 1.09-1.14 average range.”

“The caveat is the timing of a turn in the US Dollar. Should the Fed turn more dovish in its monetary policy, the USD could weaken across the board. The timing of such a move remains difficult to forecast, however.”

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