Analysts at Nordea Markets suggest that the inflation spread between the US and the Euro area is still picking up, which leads to diverging central bank outlooks and the potential for lower EUR/USD. Key Quotes “Judging from our forward-looking inflation models, EUR/USD should head lower to levels below 1.15, before rebounding higher in Q4.” “We also continue to hold the view that a more wide-spread escalation of the trade war is a long-term USD positive risk scenario, as a trade-war will lead to slowing global growth, which usually coincides with a stronger USD.” “Another factor that supports our story of “lower before higher” in EUR/USD is the relative supply of EUR and USD in the respective banking systems.” “Over the next three to five months it is hence most likely that the withdrawal of USD through the Fed’s balance sheet unwinding will outpace the EUR TLTRO repayments. This leaves downside risks for EUR/USD from a relative supply perspective. Hence we lower our 2018 end forecast from 1.23 to 1.20 and stress the downside risks.” “Heading into late this year and also 2019, we expect the relative liquidity withdrawal to turn EUR/USD positive again, as TLTRO repayments will start to gather pace – and our long-term target of 1.30 is still on the cards for EUR/USD in late 2019.” 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 USD/CAD near term support appears below 1.3280 – Scotiabank FX Street 3 years Analysts at Nordea Markets suggest that the inflation spread between the US and the Euro area is still picking up, which leads to diverging central bank outlooks and the potential for lower EUR/USD. Key Quotes "Judging from our forward-looking inflation models, EUR/USD should head lower to levels below 1.15, before rebounding higher in Q4." "We also continue to hold the view that a more wide-spread escalation of the trade war is a long-term USD positive risk scenario, as a trade-war will lead to slowing global growth, which usually coincides with a stronger USD." "Another factor that supports our story of… Top 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.
