Morgan Stanley economists analyze the prospects of the Euro.
EUR/CHF will rise slightly towards parity
We expect EUR/USD to drop to 1.02 by the end of the year, driven by investors’ defensive bias, positive carry and slow local growth. This trend is somewhat mitigated by the current shift in capital flows.
However, we expect the Euro to outperform its regional counterparts. we keep a long-term bullish bias for EUR/GBP and we expect it to break above the 0.90 level in the next 12 monthssince the repatriation of capital to Europe contrasts significantly with the lukewarm demand for investment in the United Kingdom by investors.
We expect EUR/CHF to rise marginally towards parityas the Euro’s positivity is partly offset by the defensive appeal of the Swiss Franc.
Source: Fx Street
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