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Chief Analyst at Danske Bank Arne Rasmussen expects the pair to move within a consolidation theme in the next months.

Key Quotes

“For FX markets we have over the past months seen a significant repricing of the Italian political risk premium embedded into the EUR”.

“Indeed, diminished Italy worries and consensus over summer positioning for a budget deficit fairly close to the announced figure was an important reason for us to raise our near-term EUR/USD forecast profile this month”.

“As a result, the announced budget should have but a limited impact on the EUR and we still pencil in a range-trading EUR/USD over the coming months with risks skewed towards a slightly stronger USD”.