Shelter demand is likely to intensify in the coming months. In the opinion of Rabobank economists, this suggests that there will be new bouts of dollar strength, which could drag the pair EUR/USD to recent lows in the next month.
There is only room for a move towards the 1.10 area in a 12 month view
“We see the risk of the US entering a recession, probably in 2023. While weaker growth in the US will also weigh on expectations about the pace and extent of Fed rate hikes. The dollar’s role as a haven currency suggests it is likely to hold a firmer profile for longer.”
“We see the risk of a re-attempt of EUR/USD’s recent lows near 1.0350 in the coming months and see room for only moderate movement towards the 1.10 area on a 12 month view.”
Source: Fx Street
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