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EUR/USD: Downside risks in the short-term – Danske Bank

According to analysts from Danske Bank, more short-term downside risks for EUR/USD emerged as outflows could pick up and relative rates could favour the US.

Key Quotes:

“Due to the short-term downside risks, we look for bond yields in the US and Germany to stay low in the months ahead. However, as our base case is still that we are not entering a new euro debt crisis, we continue to see higher bond yields on a 12-month horizon.”

“The euro has taken a big hit recently due to both the rising risks and continued decent US data. This week, more US regional business surveys increased to very robust levels. We see continued downward risk to EUR/USD in the short term. Our 12-month EUR/USD forecast of 1.28 is also currently under review.”

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