The break above EUR/USD1.17 at this time is additional proof of each USD weak spot and the attractiveness of the European renaissance story, Rabobank’s FX analyst Jane Foley reviews.
Stronger Euro could stir ECB doves
“That mentioned, simply as USD weak spot is a boon to US exporters, EUR power is a headwind for European firms that are already below fireplace from tariff associated uncertainties.
“Economists count on that German development will stay lacklustre this yr and, whereas the ECB has signalled that it has neared the underside of its rate of interest slicing cycle, additional sharp beneficial properties for the EUR may unleash ECB doves.”
“Additionally, CFTC speculators’ information are starting to trace that positioning could also be changing into stretched. Thus, whereas we have now introduced ahead our EUR/USD1.20 forecast from an 18-month view to 12 months, we don’t count on the transfer to be a straight line. We proceed to see scope for pullbacks in favour of the USD on a 3-month view.”
