EUR/USD: NAB maintains bearish forecast, expects a drop to 1.05 at end of year, after some hesitation within 1.08-1.1250 range

In a note released today, the NAB bank continues to believe that the economic environment continues to point to strong gains by the USD, especially against the EUR.

"The risk here is of a larger drop than expected, as the rate differential is evolving in favour of the USD.

In an environment where uncertainty about the fate of Greece in the euro zone should remain high for some time, we expect the EUR/USD to evolve within the 1.08-1.1250 range for now.

In the longer term, as the Fed is moving towards a rate hike and the ECB is pursuing its QE, we expect the EUR/USD to hit 1.07 at the end of September and 1.05 at the end of December."