EUR/USD seen moving toward 1.06/1.03 in 6/12 months – Danske

Matías Salord FXStreet

Analysts at Danske Bank continue to forecast a lower EUR/USD over the next months after the rate hike from the European Central Bank (ECB).

Key quotes:

The dovish hike from the ECB and ongoing US outperformance are weighing on the cross.

We make no changes to our EUR/USD forecast, and hence we maintain our strategic case for a lower EUR/USD based on relative terms of trade, real rates and relative unit labour costs.”

We expect the relative strength of the US economy to continue weighing on the EUR/USD in the coming months as growth differentials take the driver’s seat, and we continue to forecast the cross at 1.06/1.03 in 6/12M.

As it is hard to imagine a sudden change of the current USD momentum, and with commodity prices currently rising, we may reach our 6M forecast for the cross earlier than expected.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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