EUR/USD may not escape a sub-parity paradigm and tumble to 0.85/0.90 – TDS

How low can EUR/USD go? Economists at TD Securities note that the world’s most popular currency pair could test the 0.90/0.85 region.

More EUR downside to be had

“With EUR/USD near parity, the more pressing question is whether this will offer solid support. While we expect some defense at this level, EUR/USD may not escape a sub-parity paradigm and 0.85/0.90 could soon become reality.”

“It is too much to ask for capital flows to offset the erosion in trade, leaving EUR's much-heralded current account a drag for the currency.”

“EUR/USD is following a similar profile to the last Fed cycle, suggesting more EUR downside to be had.”

“Relative curve pricing and equity performance keep the prospects of EUR upside remote.”