Jane Foley, senior FX strategist at Rabobank, suggests that since the start of this month EUR/USD has crept higher by over 2% with a significant surge following this morning’s news that the UK and the EU had agreed a Brexit deal. Key Quotes “Brexit is clearly a factor in the move with optimism with respect to Brexit buoying the pound and rubbing off on the EUR. That said, USD weakness also appears to be contributing to the move in EUR/USD. This raises the question of whether the greenback is being subjected to profit-taking or if we are seeing the start of a more prolonged period of weakness in the USD.” “This morning’s news that the UK and the EU have agreed on a Brexit deal has injected a fresh shot of enthusiasm into GBP. Over the past week the EUR has been clinging to GBP’s coat-tails as optimism regarding the prospects of a deal grew. The fact that no side was walking away from the negotiating table, combined with the fact that the Benn Act should in theory rule out the prospect of a hard Brexit on October 31 resulted in a significant degree of short-covering in GBP since the start of this month.” “Looking forward we continue to expect upside potential for the single currency will be limited by the weak German economic backdrop and by speculation that the ECB could ease policy further in the months ahead. Clearly the outlook for EUR/USD also depends on the broad performance of the greenback.” “We have been USD bulls since March 2018 and the DXY dollar index has been trending higher throughout the ensuing period. Supported by the Brexit-effect it is likely that this month’s pop higher in EUR/USD is related to profit-taking. That said, it is useful to re-evaluate the factors that have been driving USD strength in this period in order to assess whether its resolve is being to wane.” “Given the risks to global growth, we expect USD demand to remain well underpinned in the coming months. That said we do expect some broad-based slippage in the USD next year based on our assumption of an aggressive step up in the pace of Fed rate cuts. Our 3 month forecast for EUR/USD is 1.07 and our 12 month forecast is 1.12.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next UK PM Johnson: Lawmakers need to deliver Brexit without any more delay FX Street 4 years Jane Foley, senior FX strategist at Rabobank, suggests that since the start of this month EUR/USD has crept higher by over 2% with a significant surge following this morning's news that the UK and the EU had agreed a Brexit deal. Key Quotes "Brexit is clearly a factor in the move with optimism with respect to Brexit buoying the pound and rubbing off on the EUR. That said, USD weakness also appears to be contributing to the move in EUR/USD. This raises the question of whether the greenback is being subjected to profit-taking or if we are seeing the start… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.
