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While EUR/USD has risen by over 5% so far this year, the exchange rate is still undervalued, according to analysts at Goldman Sachs. 

“The pair’s longer-run fair value is 1.30, and the single currency is well placed to participate in the broad Dollar weakness,” noted Zach Pandl, global co-head of foreign exchange strategy at Goldman Sachs.

Key points

Eurozone domestic markets should benefit from a broad global recovery. 

Goldman Sachs’ 12-month target is 1.25. 

That target could be reached sooner-than-expected on coronavirus vaccine approval and potential Joe Biden victory in the US Presidential elections.