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Jens Pedersen, Senior Analyst at Danske Bank, still sees the pair falling below the 1.1300 handle in the next couple of months.

Key Quotes

“USD a tad weaker on as midterm result became known (with tail risk of Republican full control of Congress priced out), but the widely expected midterm result is unlikely to be a game changer for G10 FX markets: USD is set to enjoy continued support from US cyclical and carry outperformance”.

“A lame-duck Trump only adds marginally to the list of USD positives: new fiscal initiatives should be minimal (i.e. no tax reform 2.0) and the trade dispute should stay confined to China (i.e. not spreading)”.

“We expect a US-China trade deal further out, but this is not imminent, and hence any relief for EUR/USD from this should not be expected until well into 2019. Hence, we still look for EUR/USD to move below 1.13 before year-end”.