EUR/USD: Risk of a dip to 1.05 on a 3-month view – Rabobank

The EUR has weathered the recent storm reasonably well. Looking ahead, how EUR trades in the coming months could be closely linked with political developments in the Eurozone, economists at Rabobank report.

Key quotes

“While the Eurozone’s current account surplus may afford the EUR some protection, it is unlikely that investors have much of stomach for another long stretch of tensions within the Eurozone.”  

“It is our view that broad-based USD strength will persist through this crisis and until green short of recovery become evident in parts of the global economy.”  

“How well the EUR performs vs the USD could be driven by domestic politics and whether or not the fiscal cracks in the Eurozone are again laid bare.  We see risk of a dip to EUR/USD 1.05 on a 3-month view.”