EUR/USD expected to be trading below current levels at year-end – Rabobank

FXStreet Insights Team FXStreet

EUR/USD has had very little difficulty pushing through its spring high – just below 1.11. Economists at Rabobank analyze the pair’s outlook.

A soft USD is likely to prevail in the near-term

Signs of disinflation in the US and a high level of scepticism about the ability of the Fed to hike rates beyond the July meeting suggest that a soft USD is likely to prevail in the near-term. That said, signs that the ECB’s rate hike cycle is moving towards its peak suggest that EUR/USD could struggle to make further gains beyond the summer season. Additionally, if US recession fears strengthen into the end of the year, the USD could benefit from broad-based support.

We have revised down our USD forecasts across the board on a one-month view in response to the disinflationary signals in the US. However, in view of our house forecasts surrounding US recession risks, and in consideration of the economic headwinds facing the Eurozone, we see EUR/USD trading lower into year-end and through the early part of 2024.

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD stalls rebound above 0.7050 amid fresh Mideast tensions

AUD/USD stalls its rebound from almost two-month lows and treads water near 0.7050 in Asia on Monday, as the US Dollar pauses following Friday's upbeat US NFP-led blowout rally to a two-month high. However, renewed geopolitical tensions, along with surging bets on Fed rate hikes, continue to act as a tailwind for the USD, capping the higher-yielding Aussie.

USD/JPY holds higher ground toward 160.50 despite 'Yentervention' fears

USD/JPY holds higher ground toward 160.50 in Monday's Asian trading, despite intervention fears. Japan’s revised GDP print, which confirmed that the economy lost momentum in the first quarter, weighs on the Japanese Yen. Meanwhile, Friday's upbeat US NFP report and fresh Israel-Iran attacks favor the US Dollar bulls, underpinning the currency pair.

Gold set for more pain amid renewed Mideast hostilities

Gold is licking its wounds, hanging close to three-month lows of $4,300 in Asia on Friday. The bright metal is consolidating before resuming Friday’s sell-off amid re-escalation in the Middle East and hawkish US Federal Reserve expectations.

Bitcoin under pressure, Ethereum breaks support and XRP weakens targets $1

Bitcoin, Ethereum, and Ripple remain under pressure at the start of this week after losing more than 14%, 15%, and 13%, respectively, in the previous week. BTC struggles below $63,000, ETH loses key support zones, while XRP’s momentum indicators continue to favor further downside.

Week ahead – Fed countdown begins amid US inflation data and geopolitical risks

Fed Chair Warsh’s first meeting approaches as key US inflation data could reshape expectations. Oil prices remain elevated as US-Iran talks continue; tariffs also return to the spotlight. ECB is expected to hike; will it be a one-off move or is July live?

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.