30 Apr 2015
EUR/USD still viewed at 1.04 in 12-month – Rabobank
FXStreet (Edinburgh) - In the view of Jane Foley, Senior Currency Strategist at Rabobank, the pair could head towards the 1.04 level in a 12-month horizon.
Key Quotes
“While volatility has remained at a heightened level over the past month, the downtrend that has dominated EUR/USD since July 2014, has begun to show signs of stalling”.
“We expect that USD strength will remain a key theme of 2015, but recent activity underpins our view that the pace of further USD gains versus the EUR in the coming months will be noticeably slower than the pace set in the initial months of this year”.
“The dynamic behind the downtrend in EUR/USD remains essentially intact. The widely held perception that the Federal Reserve will be hiking interest rates this year at a time with the ECB is following an extremely accommodative policy is behind the sharp drop in the value of EUR/USD since the middle of last year and this expectation remains in place”.
“That said, the realisation that growth in the US slowed in the first part of this year at a time when eurozone growth has been strengthening has thrown fresh light on the debate regarding the outlook for relative interest rate differentials. The market currently doesn’t expect the Fed to hike rates before September 2015, we maintain our view for the first Fed hike in December. We retain our forecast that EUR/USD will slip to 1.04 on a 12 month view”.
Key Quotes
“While volatility has remained at a heightened level over the past month, the downtrend that has dominated EUR/USD since July 2014, has begun to show signs of stalling”.
“We expect that USD strength will remain a key theme of 2015, but recent activity underpins our view that the pace of further USD gains versus the EUR in the coming months will be noticeably slower than the pace set in the initial months of this year”.
“The dynamic behind the downtrend in EUR/USD remains essentially intact. The widely held perception that the Federal Reserve will be hiking interest rates this year at a time with the ECB is following an extremely accommodative policy is behind the sharp drop in the value of EUR/USD since the middle of last year and this expectation remains in place”.
“That said, the realisation that growth in the US slowed in the first part of this year at a time when eurozone growth has been strengthening has thrown fresh light on the debate regarding the outlook for relative interest rate differentials. The market currently doesn’t expect the Fed to hike rates before September 2015, we maintain our view for the first Fed hike in December. We retain our forecast that EUR/USD will slip to 1.04 on a 12 month view”.