EUR/USD: Strong forward guidance, a game changer - Danske Bank

Matías Salord FXStreet

The European Central Bank today announced an easing package. According to analysts from Danske Bank, the ECB regained credibility and they forecast EUR/USD at 1.10 on 1-3M.

Key Quotes:

“In the short term, the combination of the rate cut and tiering could cause volatility in the short-term EUR money market, which could spill over to EUR/USD.”

“Over the medium-term, we think that the ECB regained some credibility today with its strong forward guidance, which makes EUR a more two-sided bet. We keep our forecast on 1-3M of 1.10.”

“The Fed meets next week, where we look for a 25bp cut in line with market expectations, but likely no strong precommitment to further easing which will could weigh on EUR/USD.”

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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