EUR/USD: Remaining range-bound – Danske Bank

Economists at Danske Bank believe EUR/USD will remain range-bound over the coming 12M despite US inflation risks as this is balanced by a weak Eurozone political and economic backdrop.

Key quotes

“Despite extreme fiscal and monetary policy action across countries, we deem that it will be hard to find much confidence in the EUR. This is especially so as the recent turmoil again exposed the institutional set-up in Europe as the root cause of permanent and growing EUR weakness.”

“We forecast EUR/USD at 1.09 on a 1-3M horizon in line with improving risk sentiment and corona numbers. However, we stick to our long-term forecast of 1.07 and thus that USD should remain ‘strong’ by historical standards.”