EUR/USD could challenge 0.90 before settling around 0.93-0.94 — Standard Chartered

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The EUR/USD it will move lower in the short term, but economists at Standard Chartered expect the pair to rise again within 12 months.

Downside pressure on the euro in the short term

“EUR/USD is likely to weaken over the next 1-3 months, potentially testing support around 0.90, before settling around 0.93-0.94.”

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“Although European gas inventories have reached almost 85% of capacity, concerns over energy security and rationing, coupled with a relatively slower pace of rate hikes by the ECB, are likely to exert downward pressure. on the euro in the short term.”

“Over a 12-month horizon, we expect a narrowing of US-European interest rate spreads and a reversal of their current undervaluation to drive the euro higher.”

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Source: Fx Street

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