EUR/USD has fair currently faced renewed headwinds, pushing the unhealthy help below 1.10. Economists at Danske Bank protect their strategic case for a lower EUR/USD.
USD power in store
“In line with market expectations, we mediate the Fed has delivered its closing rate hike for this mountain hiking cycle. On the choice hand, we mediate the most modern 3×25 bps rate cuts priced for the relaxation of the year seem too aggressive. If we are exact in this call, that will add some USD toughen in H2. For the ECB, we mediate there are three 25 bps rate hikes left, bringing the policy rate as much as 4%.”
“We protect the strategic case for a lower EUR/USD essentially essentially based on relative phrases of commerce, staunch charges and relative unit labour charges. Despite the impending Fed discontinuance, we gaze the chance of the USD discovering further near-length of time toughen as we ask the Fed to support charges regular into 2024. Moreover, we mediate the outlook of the US financial system looks to be much less depressed.”
“We continue to forecast the EUR/USD unhealthy at 1.03 in 6-12M.”
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