The current EUR/USD’s current consolidation phase is expected to be broken to the downside, according to the Rabobank FX analyst’s team. The frictions between EU members amid the economic consequences of the COVID-19 lockdowns will weaken the euro against the safe-haven USD, according to the experts.
Key Quotes
“Market participants can do little else but look on as lawyers and politicians debate the implications of this month’s German Court ruling on the proportionality of ECB asset purchases. Whatever the eventual outcome of this debate on ECB business, the fact that there is a dispute is evidence of further friction within the EU.”
“Since the lockdowns are lengthening unemployment queues and creating the biggest economic shock at least since the Second World War, it is likely that if politicians do not steer carefully that tensions will become inflamed within the region.”
“Set against a backdrop of solid demand for the USD, we see scope for a dip in EUR/USD towards 1.05 on a 3-month view.”
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