In the opinion of Rabobank economiststhe US dollar will remain well supported for several months, with the Fed’s hawkish position underpinning the greenback’s safe haven appeal.
Possibilities of new falls of the EUR/USD below par
“Given that the Federal Reserve still has a lot of work to do to control price pressures and ensure that inflation expectations are well anchored over the medium term, it can be assumed that the Federal Open Market Committee will not be willing to give up its position. Hawkish yet. As this will weigh on risk assets, we see a risk that USD strength will persist into early next year.”
“We expect the dollar to remain the safe haven of choice relative to the yen or Swiss franc, given rising short-term interest rates in the US.”
“Also considering that the eurozone is facing a difficult winter that includes the possibility of energy rationing for some companies, we see room for further declines in EUR/USD below parity.”
Source: Fx Street
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