EUR / USD rallies to session highs at 1.1835

• EUR / USD appreciates for the second day in a row to turn back towards 1.1835.
• The US dollar is losing ground on concerns about rising COVID-19 infections.
• EUR / USD seen at 1.1700 in three months – Rabobank.

The euro It is undergoing a slight recovery against the US dollar on Friday, extending its recovery from lows of 1.1745 earlier this week to 1.1835. The common currency has managed to regain lost ground favored by a weaker US dollar.

The euro recovers due to the weakness of the US dollar

The US dollar has remained on the defensive on Friday, retreating against safe havens like the yen and the Swiss franc, with the market becoming increasingly cautious about the increase in COVID-19 cases in the US and Europe. Concerns about the economic impact of the pandemic have replaced enthusiasm for the vaccine’s progress as the market accepts the fact that there will be no cure available to prevent a dramatic escalation in cases this winter.

Against this backdrop, U.S. Treasury bond yields have continued to decline from post-pandemic highs hit Wednesday. The 10-year yield fell to 0.88% from 0.97%, which has increased the downward pressure on the US dollar.

EUR / USD seen at 1.1700 in three months – Rabobank

Rabobank’s currency analysis team considers that the upside potential of the euro is limited in the medium term: “On 1 September, the comments of the ECB’s chief economist made it clear that he was concerned about the rise in the value of the EUR during the summer and the EUR / USD rally stopped at 1.20. We still see this area marking strong psychological resistance for the EUR / USD and we would expect the currency pair to trade primarily in the 1.20 to 1.16 range in the coming months. We have revised our 3-month EUR / USD forecast up to 1.17 from 1.16 and our 6-month forecast to 1.18 from 1.14. ”