UBS: Do not expect EUR/USD to break 1.10 level

Union Bank of Switzerland’s analysis team us advising against fighting this latest euro fall under the current circumstances.

Key Quotes

“We expect this trend to reverse somewhere above EUR/USD 1.10 and do not expect 1.10 to be broken.”

“Further out, we are bullish on the euro, both if Eurozone economy starts to recover from its current weakness and if the risk case of a more serious downturn materializes, because in the latter case the US Fed has scope to cut rates and the ECB has limited ammunition to ease further.”

“We forecast EUR/USD at 1.15 over six months and 1.20 over 12 months.”