EUR/USD aims to 1.12 in 12-month – Danske Bank

Kristoffer Lomholt, Senior Analyst at Danske Bank, sees the pair climbing to the 1.12 area within a year’s view.

Key Quotes

“USD stabilised yesterday and EUR/USD fell back below 1.0730 while USD/JPY increased to the 113.50-114 range overnight”.

“The trend lower in USD this year to a large extent reflects the vacuum after ‘Trump fever’ and pricing of the Fed in Q4 16, while the lack of details in Trump’s economic plans is clearly a negative for the USD at the moment”.

“As such, we still see EUR/USD in the range of 1.0350-1.0750 in the coming months, and we still target the cross at 1.05 in 3M”.

“However, we do not expect the USD to recover before we get more information on the US’s fiscal policy”.

“A clean break of the 5 December high at 1.0796 could technically open up room for a move higher in EUR/USD, but even if it breaks this level, we see little prospect of a sustained rally in EUR/USD at this stage. Longer term, we still see EUR/USD higher driven by fundamentals and valuation, targeting 1.12 in 12M”.