The pair EUR/USD has settled above the 1.09 level. Rabobank economists analyze the pair’s prospects.
The USD trend change will not be smooth
In the coming weeks, we expect choppy activity as asset prices react to economic data releases in hopes that Fed policy will be questioned, and we see room for EUR/USD to decline to three months view, as the Fed struggles to contain market expectations regarding the timing of interest rate cuts.
Furthermore, we maintain the view that the EUR is likely to come under pressure from weak growth and low competitiveness in the Eurozone, suggesting the possibility of a prolonged period of relative weakness for the EUR.
While we have revised upward our forecasts for EUR/USD and now put it at 1.09 ahead 12 months instead of 1.05, this level is well below most model-based estimates for the fair value of EUR/USD .
Source: Fx Street
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