7 Feb 2014
Flash: EUR/USD to end the year lower - Rabobank.
FXStreet (San Francisco) - Jane Foley, Senior FX Strategist at Rabobank, commented in a recent report that Rabobank expects EUR/USD to end the year lower, however, there are several factors supporting the EUR. Inside the report, Foley sees EUR/USD ending the year around 1.30 and 1.28 as 12-month forecast.
Key Quotes
It is our central view that EUR/USD will end the year lower. However, we do not expect that the EUR will yield ground to the USD willingly and see risk that EUR/USD could struggle to break below the 1.300 level this year.
There are several reasons to expect that the EUR will remain resilient in the face of Fed tapering this year. In response to recent emerging market turmoil, the EUR even began to display signs of safe haven behaviour.
We view the key risks to this outlook as being either a step up in dovish rhetoric from the ECB or a pick-up in the pace of tapering by the Federal Reserve. Both events could knock EUR/USD sharply lower.
That said, Draghi refrained from showing a dovish hand at this week’s ECB press conference and the disappointing US January payrolls report provided little reason to expect the Federal Reserve to precede with anything other than caution in reducing the level of its monthly asset purchases.
Key Quotes
It is our central view that EUR/USD will end the year lower. However, we do not expect that the EUR will yield ground to the USD willingly and see risk that EUR/USD could struggle to break below the 1.300 level this year.
There are several reasons to expect that the EUR will remain resilient in the face of Fed tapering this year. In response to recent emerging market turmoil, the EUR even began to display signs of safe haven behaviour.
We view the key risks to this outlook as being either a step up in dovish rhetoric from the ECB or a pick-up in the pace of tapering by the Federal Reserve. Both events could knock EUR/USD sharply lower.
That said, Draghi refrained from showing a dovish hand at this week’s ECB press conference and the disappointing US January payrolls report provided little reason to expect the Federal Reserve to precede with anything other than caution in reducing the level of its monthly asset purchases.