Piet Christiansen, Senior Analyst at Danske Bank, noted the pair could extend the 1.15-1.21 range in the near to medium term.
“With a Fed June hike widely expected, it should not give rise to a significant market reaction”.
“USD risks are more in the dots and we maintain that the market is pricing the Fed too softly beyond 2018 and to the extent that the recent recoupling between the USD and US rates continues, this suggests that USD will stay supported by its rising carry appeal for some time still”.
“Adding a likely foot-dragging ECB, the recent rebound in EUR/USD should be halted and we look for the 1.15-1.21 range to be broadly sustained on a 6M horizon”.
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