The EUR/USD continues to move sideways around the parity level ahead of next week’s FOMC meeting. According to Rabobank analyststhe risks on the EUR/USD are tilted to the downside and warn that it could fall to 0.95.
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“The precarious position of growth in the region (euro zone) in the coming months may mean that the increase in short-term interest rates will not translate into a significantly stronger euro. In our opinion, the market has not yet priced in risks to growth in the region in the coming months. Given the coincidence of dollar strength, we expect EUR/USD to move further below parity in the coming weeks.”
“In our view, the dollar, which is a safe haven, is likely to remain well supported until investors are willing to return to risky assets. This may be a few months from now. This period will span what is likely to be a testing winter for the Eurozone economy.Despite further potentially aggressive rate hikes expected from the ECB, EUR/USD is at risk of falling further towards 0.95 in our view.”
Source: Fx Street
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