Synopsis:

Credit Agricole sees potential mild support for EUR/USD from Eurozone repatriation flows, though the scale is expected to be limited by structural constraints such as lack of compelling alternatives to US assets.

Key Points:

• Modest Repatriation Flows:
  Eurozone investors could shift some capital home, providing marginal support to EUR/USD, but well below historic magnitudes.

• Equity Constraints:
  Limited credible alternatives to US tech equities mean equity-based rebalancing will likely remain constrained, capping euro upside.

• Fixed Income Considerations:
  Eurozone investors may hesitate to trim US Treasury holdings amid fiscal uncertainty and rate volatility, dampening potential EUR buying.

• USD Support in 2026:
  Portfolio and FDI inflows into the US could re-intensify next year, reinforcing structural demand for USD.

Conclusion:

Repatriation flows may offer near-term marginal support to EUR/USD, but longer-term structural capital flows continue to favor the USD, especially into 2026.