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“The Bloomberg FX survey shows that the market consensus for EUR/USD at the end of Q2 2019 is 1.22. Our forecast at 1.12 is the lowest out of the 25 most recently submitted,” Rabobank analysts note.

Key quotes

“We first turned bullish on the USD vs. the EUR in the middle of March. Since then, despite our non-consensus expectations of USD strength, the greenback has tended to outperform even our forecasts. The pressure on emerging markets over the past week or so has strengthened our resolve in our forecast that USD strength has further to run.”

“We currently expect the EUR/USD to remain under pressure for the next 9 to 12 months or so before the EUR starts to recover ground. This assumes that the ECB retains its guidance that its rates will remain at present levels at least through the summer of 2019.”

“Concerns about the impact of trade wars on world growth has been a factor undermining confidence in risky assets. In addition, the impact of the rising cost of USD funding has been another key cause of the pressure on EM. Understandably, the currencies of countries which have issued relatively high levels of USD denominated debt have tended to be most vulnerable to the impact of higher US interest rates.”