The current environment, with slowing economic growth, is favorable for the US dollar, according to analysts at Danske Bank. They expect the pair EUR/USD stands at 1.04 in a one month perspective, at 1.03 in three months and at 1.00 in a year.
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“Fundamentally, the US should remain a high interest rate market and equities remain attractive to foreign investors. This means the US is likely to attract capital, which helps the dollar.”
“Large negative terms-of-trade impact in Europe versus the US, further cyclical weakening among trading partners, coordinated tightening of global financial conditions, extension of USD strength, and downside risk Eurozone trades keep our attention on EUR/USD moving further lower (targeting 1.00), a view not shared by consensus.”
“The key risk for EUR/USD moving towards 1.15 is to see global inflationary pressures fade and industrial production pick up. Upside risk also includes renewed attention to Chinese credit easing and capex rebound.” world, but none of them seem to materialize, at the moment.”
Source: Fx Street
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