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#1 01-06-2015 11:54:25

johnedward
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EUR/USD: Danske Bank says pair could fall to parity before new rise

EUR/USD: Danske Bank says pair could fall to parity before climbing again on the basis of long-term fundamentals


http://www.forex-central.net/forum/userimages/LOGO-Danske-Bank.jpg


In a note published today, Danske Bank believes that fundamentals remain in favour of a drop of the EUR/USD within 3-6 months, due to a rate hike from the Fed that has not yet fully been integrated into pricing, and the ECB's remaining commitment to maintain an aggressive monetary policy.

"We therefore believe that the relative rates will once again start weighing on the EUR/USD before the summer, and we continue to expect a drop to 1.08 within 3 months, then 1.02 within 6 months with the possibility that this target is exceeded in the direction of parity.

However, once inflation in the euro area has started to rise during T2, and higher Fed rates will be fully integrated into prices, the EUR/ USD could resume its rise based on medium-long termfundamentals.

In the end, our 12-month forecast is therefore a price at 1.08."


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