The EUR/USD pair has recovered in the last month and the cross has broken above the 1.08 level. The economists of Danske Bank They analyze the pair’s prospects.
Greater short-term upside potential
We maintain the strategic argument for a decline in EUR/USD based on relative terms of trade, real rates (growth prospects) and relative unit labor costs.
We continue to expect a bearish trajectory over the next 6-12 months.
In the near term, we continue to believe there is further upside potential for the cross, mainly due to weaker than expected US economic data and a generally positive risk appetite. However, escalating geopolitical tensions pose a risk to our near-term outlook for a weaker USD.
Forecasts: 1.10 (1 month), 1.09 (3 months), 1.06 (6 months), 1.04 (12 months)
Source: Fx Street
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