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According to analysts from Danske Bank, the relative-rate support to the US dollar and political risks in Europe will dominate, leaving the EUR/USD pair in a sub-1.15 range but they see it staying above 1.10.  

Key Quotes:  

“In June, the ECB opted to put an end date to QE but effectively managed to keep rate hike expectations at bay with its new time-dependent forward guidance, suggesting the earliest meeting at which a hike could be delivered is September 2019; we still call for a 20bp hike in December 2019. The Fed delivered the widely expected 25bp hike in June and we believe it is likely to deliver two more hikes in 2018, with the next due in September. Thus, the outlook for relative rates is skewed in favour of a lower EUR/USD near term. However, this said, we stress that pricing of the ECB is now also on the dovish side of our expectations.”

“Short term, we think the relative-rate support to USD and EUR political risks will dominate, leaving EUR/USD in a sub-1.15 range but we see the cross staying above 1.10. However, in our view, the break of 1.15 on Turkey accelerated the recent fall and the Turkish risk premium should eventually fade and alleviate some of the downward pressure from USD carry near term. In addition, the relative cyclical picture may shift in favour of the euro area towards year-end and hold a hand under an otherwise strained pair.”  

“Medium term, we expect the euro capital outflows of recent years to fade as the first ECB hike draws closer. Alongside valuation, this is set to support EUR/USD in 6-12M. We lower our near-term profile due to the significance of the break of 1.15 and now see EUR/USD at 1.12 in 1M, 1.13 (previously 1.17) in 3M, 1.18 (previously 1.20) in 6M, and 1.25 (unchanged) in 12M.”