EUR/USD still seen at 1.04 in 1-month – Danske Bank

Senior Analyst at Danske Bank Sverre Holbek still expects the pair to grind lower to the 1.04 area in a month’s view.

Key Quotes

“The FX market interpreted the comments from ECB President Mario Draghi at yesterday’s press conference as dovish, which sent EUR/USD below 1.06. In general, this is in line with our short-term view on EUR/USD, where we look for EUR/USD to go 1.04 in 1M and 1.05 in 3M”.

“We note that it is not a one way street lower for EUR/USD in the near term though”.

“The change in US cash balance policy will result in a USD cash deluge from the treasury account in Q1. The increase in USD supply will ease upward pressure on the USD and, hence, downside potential for EUR/USD”.