EUR/USD: Seen at 1.05 in three months – Rabobank

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Analyst at Rabobank keep their one and three month forecasts for the EUR/USD pair at 1.06 and 1.05 respectively, however they tweaked their six and 12-month forecast, pushing them barely greater.

Key Quotes: 

“The buck’s secure haven high quality stems from its place because the dominant foreign money within the international fee system. Which means that disaster can set off USD hoarding behaviour. These ought to have been assuaged by the Fed’s announcement final weekend that it had put in place each day swap line with 5 different main central banks. These might run to the tip of subsequent month. In our view, this motion by the Fed was instrumental in permitting EUR/USD to development greater in the beginning of the week and break (quickly) the important thing 1.08 resistance degree. This measure, nonetheless, is unlikely to completely offset secure haven demand for the buck if confidence in banks fall additional.”

“In view of prevailing tensions we now have not right now revised our forecast of a dip in EUR/USD to 1.05 on a 3 month view, though we’re clearly watching occasions rigorously. Nevertheless, have raised our 6-month forecast from EUR/USD1.03 to 1.06 which additionally displays a comparatively agency profile for the USD. Whereas calmer waters on this time-frame would reduce secure haven USD demand, in tune with our central view this may facilitate the pricing out of Fed fee cuts which would supply the buck with help.”