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Jane Foley, Senior FX Strategist at Rabobank, forecasts the EUR/USD pair trading at 1.17 next month as the US dollar is to see a short-covering of its positions amid volatility due to US Elections.

Key quotes

“There is little doubt that markets will be breathing a sigh of relief when US politicians sign off on another fiscal package. However, it is possible that before that point is reached investors may have to face a contested result and the knowledge that the recovery in the US labour market is slowing as winter approaches and household incomes are feeling more strain.”

“We see scope for short-covering of USD positions on a one-to-three month view. Our one-month EUR/USD forecast stands at 1.17.”