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2 Sep 2015
EUR/USD seen at 1.05 in 12-month – Rabobank
FXStreet (Edinburgh) - Senior Currency Strategist at Rabobank Jane Foley still sees the pair at 1.05 within a year’s time.
Key Quotes
“Much of the brutal movement in G10 currencies in recent weeks can be explained by position adjustment. In particular the massive EUR shorts that were built during the second half of 2014 and into March 2015 have now seen a dramatic fall”.
“That said, continued downside pressure on risky assets suggests the market is not likely to rush back into the carry trade and aggressively re-build EUR shorts in the near-term”.
“The hurry to cover short EUR positions in recent weeks has had a strong impact on less risky assets such as the USD. Even though the market is far less confident of a September Fed rate increase than it was just a month ago, the fact that the Fed is still expected to start normalising policy at a time when the ECB is likely to be aggressively engaged in monetary easing should still lend support to the US dollar versus the euro into 2016”.
“While we have recently revised up our 1 to 6 months EUR/USD forecasts. We remain unconvinced that the downtrend in EUR/USD is over and we have retained our long standing 12 months forecast of EUR/USD 1.05”.
Key Quotes
“Much of the brutal movement in G10 currencies in recent weeks can be explained by position adjustment. In particular the massive EUR shorts that were built during the second half of 2014 and into March 2015 have now seen a dramatic fall”.
“That said, continued downside pressure on risky assets suggests the market is not likely to rush back into the carry trade and aggressively re-build EUR shorts in the near-term”.
“The hurry to cover short EUR positions in recent weeks has had a strong impact on less risky assets such as the USD. Even though the market is far less confident of a September Fed rate increase than it was just a month ago, the fact that the Fed is still expected to start normalising policy at a time when the ECB is likely to be aggressively engaged in monetary easing should still lend support to the US dollar versus the euro into 2016”.
“While we have recently revised up our 1 to 6 months EUR/USD forecasts. We remain unconvinced that the downtrend in EUR/USD is over and we have retained our long standing 12 months forecast of EUR/USD 1.05”.