Back
18 Mar 2015
EUR/USD could visit parity in 6 months – Danske Bank
FXStreet (Edinburgh) - Christin Tuxen, Senior Analyst at Danske Bank, believes the pair’s decline could accelerate towards the parity level in a 6-month horizon.
Key Quotes
“We expect a soft EUR/USD over 3-6M, as the effects of ECB QE and the warm-up to Fed policy normalisation continue to weigh”.
“However, the EUR weakness now playing out and a lower level of oil prices and improved credit conditions should pave the way for the ECB to become less dovish earlier than the market expects”.
“Coupled with our view that a repricing of the Fed will happen mainly ahead of a first hike over the summer, the potential for upside to US rates is limited beyond 6M”.
“As the sell-off in the cross has been more dramatic than previously imagined and the QE effect more EUR negative up front, we have adjusted our forecasts but maintained the same profile. We see the cross below parity in 6M before moving higher on 6-12 months”.
Key Quotes
“We expect a soft EUR/USD over 3-6M, as the effects of ECB QE and the warm-up to Fed policy normalisation continue to weigh”.
“However, the EUR weakness now playing out and a lower level of oil prices and improved credit conditions should pave the way for the ECB to become less dovish earlier than the market expects”.
“Coupled with our view that a repricing of the Fed will happen mainly ahead of a first hike over the summer, the potential for upside to US rates is limited beyond 6M”.
“As the sell-off in the cross has been more dramatic than previously imagined and the QE effect more EUR negative up front, we have adjusted our forecasts but maintained the same profile. We see the cross below parity in 6M before moving higher on 6-12 months”.