Strategists at National Bank of Canada are wagering to a drop in the EUR/USD pair by the end of the year, following economic data from the Eurozone which seems to have lost steam.
Key quotes
“The euro lost more than 1% in January amid virus-related USD strength but also due to ongoing domestic economic woes.”
“The eurozone’s GDP was stagnant in the fourth quarter of last year, leaving growth for 2019 as whole at a six-year low of just 1.2%.”
“Weakening growth has not surprisingly held inflation and inflation expectations back, suggesting the European Central Bank may further loosen monetary policy this year.”
“While it kept monetary policy unchanged in January, the ECB acknowledged risks remain tilted to the downside. In anticipation of further divergence in monetary policies, we continue to expect EUR/USD to drop to 1.09 by year-end.”
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