Deutsche Bank with a EUR/USD forecast:
- We maintain our view that the EUR/USD range will look similar to last year’s with a break below 1.05 more likely than a sustained move above 1.10
Deutsche Bank cite, on the USD:
- high yield for the US
- dollar benefits from an environment of subdued FX volatility
- risks towards far greater divergence favouring the Fed
- the dollar as a hedge to geopolitical deterioration is strong
- both sides of US politics emphasising tariffs rather than a weak dollar policy on approach to the election
And on the euro side:
- European growth improvement already anticipated by market consensus
- ECB earlier easing vs. to the Fed
- subdued global growth recovery
- German structural challenges, ongoing fiscal policy tightening
Subdued volatility is right.
This article was written by Eamonn Sheridan at www.forexlive.com.
