What is the outlook for EUR/USD in the short and medium terms?
Here is their view, courtesy of eFXdata:
Danske Research discusses EUR/USD outlook and notes that the market is currently moving between a bottleneck-scenario (towards 1.18) and a dollar debasement case (remains above 1.20).
“In our view, the short-term theme is quite uncertain (fat tails) though likely still reflationary. We suspect that moving out of cloud-like sectors into commodities will stay a broad dollar negative. On this, we see EUR/USD to stay above 1.20 in the short-term,” Danske notes.
“Looking further ahead, we continue to expect a scenario of ‘peak reflation’ in H2 as manufacturing PMIs cools as a shift from goods to services, Chinese monetary tightening and the catch-up effect of normalizing production levels joins in. Further, we expect Fed to turn hawkish. Thus, rising real dollar rates are in our view a key theme for H2. Over H2, our main scenario remains ‘peak reflation’ and we see spot towards 1.15,” Danske adds.
For lots more FX trades from major banks, sign up to eFXplus
By signing up for eFXplus via the link above, you are directly supporting Forex Crunch.
Share
