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Analysts at Citibank offer their outlook on the EUR/USD pair, with the risks skewed to the upside over the next 12 months.

Key quotes

“EUR/USD seen at 1.1400 over three months. 

6-12 month forecast for the spot is pegged at 1.1600.

Calls for 1.2000 over the longer term.

Since the good news on the EU recovery fund, Euro denominated risk assets have traded much more robustly, and although the size of the package isn’t ‘blockbuster’, it’s certainly a step in the right direction for European policy and growth. 

In essence, EA ‘break-up’ risk premia has now markedly been reduced and may support EUR over the medium term.”