EUR/USD failed to defend the 1.06 zone on Tuesday. However, the economists Commerzbank they expect the pair goes back up if the risks disappear (gas crisis, new wars in the periphery, etc.).
The dollar’s advantage in real interest rates will largely disappear
“The market currently believes that the dollar’s advantage in real interest rates will largely disappear within five years. If the market is correct in its view, then a permanent undervaluation of the euro is not warranted. Therefore, the fact that EUR/USD continues to trade at relatively weak levels is probably due to the risk that things could change.”
“These risks (gas crisis, new wars in the periphery, etc.) point largely in a negative direction for the euro. If they disappear, the euro is likely to appreciate.”
Source: Fx Street
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