EUR/USD TO MOVE TOWARDS 1.0500 ON A THREE-MONTH – RABOBANK
Economists at Rabobank expect the US Dollar (USD) to remain resilient over the next weeks and forecast EUR/USD at 1.0500 in three months.
Scope for more broad-based USD strength over the spring
US data releases over the next few months should reveal whether the current stickiness in US inflation is temporary, a seasonal issue, or whether it is persistent in nature. This will be key in determining whether this year’s broad-based USD rally still has legs. That said, the order and extent of policy moves that are implied by market rates seem to have only the vaguest of correlations with the levels of economic activity in each of the G10 economies.
We see scope for more broad-based USD strength over the spring as the market continues to recalibrate the pace and timing of policy moves in the G10.
We continue to see the potential for EUR/USD to move towards 1.0500 on a three-month view before edging higher into year-end.
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