EUR/USD: Scope for further downside pressure

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EUR/USD: Scope for further downside pressure
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In the past few days, EUR/USD has travelled from a recent high around 1.0694 back to the 1.0540 area. Economists at Rabobank analyze the pair’s outloo

k. USD to remain well-supported The USD will likely continue to be buffered by the movement in US yields in the weeks ahead. That said, we would expect any surge in safe-haven demand to benefit the USD, even if this also drives down treasury yields.

Despite the anticipated efforts by the ECB to promote a higher for longer outlook for European rates, in our view, the weakness of the Eurozone economy suggests scope for further downside pressure on the EUR. We maintain a forecast of EUR/USD 1.02 on a three-month view.

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