In the view of economists at Rabobank, slowing global growth is likely to leave the USD well supported. Subsequently, the EUR/USD pair is set to edge lower towards the 1.03 zone in the coming months.
Growth risks could significantly dampen the outlook for the EUR
“Despite the recent move higher in EUR/USD, we continue to see risk of another attempt at the downside on a 1 to 3 month view.”
“In addition to concerns about slowing growth risks in the US and in Europe, Chinese growth is also vulnerable. On the back of the country’s commitment to its zero Covid policy, forecasters have been consistently revising down growth expectations for China in recent months.”
“Global growth risks suggest that demand for safe-haven assets is likely to remain on the front foot. This suggests the likelihood of a stronger-for-longer USD and the possibility that EUR/USD will again move back towards the 1.03 area in the coming months.”
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