EUR/USD: can the euro climb back to 1.23 this year? (NBC)

The National Bank of Canada maintains a bullish opinion of the EUR/USD for 2019, despite political and economic risks.

"Even if the euro remains under the weight of economic data and political uncertainty, we expect a rebound of the EUR/USD in 2019 and maintain our forecast for 1.23 by the end of the year.

The common currency does not look good at the moment, because of weak economic growth and political uncertainties (notably Brexit and Italy). The European Central Bank, which continues to be frustrated by weak GDP growth, low inflation and a weak banking sector in the eurozone, is unlikely to quickly change its loose monetary policy. But at some point, investors will expect the central bank to begin the process of normalising the policy. This, combined with the weakness of the USD and the reversal of large net speculative short positions on the EUR, could allow the common currency to rebound this year.

We maintain our 2019 end-of-year forecast at 1.23 for the EUR/USD."