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Analysts at Commerzbank suggest that the EUR has disappointed due to further postponement of ECB interest rate normalization and the USD is having weakness due to expiring Fed interest rate cycle and as a result for both currencies, the outlook for 2019 does not look rosy.

Key Quotes

“For the forecast of their relative price – the EUR-USD exchange rate – this means that some of the effects would have to cancel each other out. That doesn’t suggest too much movement.”

“We have therefore entered a value of 1.24 in our forecast table for the end of 2019. Ultimately, experience shows that USD-specific arguments generally dominate if no dramatic events occur in the euro area.”