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EUR/USD to settle in a higher range between 1.2000 and 1.2500 – MUFG

Analysts at MUFG Bank, see the EUR/USD pair moving with a bullish bias and excepted it to trade in the 1.1900/1.2500 range over the next month. According to them, the recent move higher in EUR/USD mainly reflects broad-based dollar weakness rather than euro strength.

Key Quotes:

“We are sticking to our bullish outlook for the euro in the month ahead. The euro has extended its advance against the US dollar after it broke out above the top of the 1.1600 to 1.2000 trading range that had been in place since late July. We now expect the pair to settle in a higher range between 1.2000 and 1.2500. The recent move higher in EUR/USD mainly reflects broad-based US dollar weakness rather than euro strength.”

“We are still assuming that the EU and UK will reach a last minute trade deal by year end and thereby avoiding even worse disruption for the euro-zone economy early next year, although the risk of a No Deal has increased recently.”

“The ECB remains concerned over downside risks to growth and inflation from the stronger euro, but is not yet prepared to lower rates deeper into negative territory in an attempt to dampen euro strength.”
 

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