In its latest client note, the strategists at Bank of America Merrill Lynch (BAML) expect the EUR/USD pair to fall further in the coming quarter amid looming trade war concerns and strengthening US economy.
Key Quotes:
EUR/USD seen at 1.12 in Q3 and 1.14 in Q4 versus 1.20 seen previously.
Trade tensions have obscured “relatively solid U.S. macro outlook” for both the near-term and medium-term.
Trade uncertainty is more negative for Eurozone economy.
U.S. benefits from “massive fiscal stimulus”.
Stronger U.S. growth will keep Fed on a hiking cycle supporting USD.
U.S. corporate repatriation from overseas could also be a driver.
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