EUR/USD has managed to stabilize and find its legs around 1.17. But it can continue recovering? Here is the view from SEB:
Here is their view, courtesy of eFXdata:
SEB Research discusses EUR/USD outlook and adopts a bearish bias in the medium term, targeting the pair at 1.10 over a three-month horizon.
“Given the outlook for continued Fed tightening this year and next, we expect the dollar to continue to regain lost ground in coming quarters.
Further widening of interest rate differentials is likely to give further support to the USD near-term and a move down towards 1.10 in EUR/USD seems likely.
However, once the ECB and other central banks start to normalize policy, we believe these forces, together with USD-negative rebalancing flows, will exert renewed downward pressure,†SEB argues.
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