Analysts at Danske Bank, expect the EUR/USD pair to stay close to 1.13 in 3M. They kept their forecast unchanged after today’s European Central Bank meeting.
Key Quotes:
“ECB President Draghi used to be known for his ability to intervene verbally in financial markets, e.g. during ECB press conferences. When he today stressed that the ECB intends to go after hitting its inflation target ‘without undue delay’, that the ECB can allow inflation to overshoot 2% and that all options are on the table, EUR/USD did not bite. This illustrates to us that words are not enough and that action is needed to weaken EUR and regain confidence in the market with regard to the ECB’s inflation target. EUR/USD decreased from around 1.1280 before the meeting to around 1.1230-40 in response to the market pricing the ECB to keep rates low for even longer.”
“In our view, the ECB did not provide arguments for EUR/USD to fall much further from here and we stick to our call for the cross to trade around 1.13 in 3M.”
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