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The analysts at Bank of America Global Research (BofA) believe that the EUR/USD pair is likely to drop to 1.1500 amid a likely rebound in the US dollar, as they revise down their 2021 price forecasts from 1.2500.

Key quotes

“Key catalysts for the US dollar strength include,

Fed and ECB policy divergence,

The potential for substantial US fiscal stimulus,

Analysts are looking for twice as fast US recovery than for the eurozone,

A still-short USD market position, particularly against the EUR and

Challenging outlook for risk assets given stretched valuations and substantial uncertainty.”

“EUR/USD seen lower at 1.1800 in June vs. the previous forecast of 1.2200.”

“The spot could drop to 1.1600 by September vs. the previous forecast of 1.2400.”