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Jun 14 - 12:55 PM

EUR/USD: Until The ECB Strategy Review, EUR/USD Is Mainly A USD Trade - BofA

By eFXdata  —  Jun 14 - 10:45 AM

Bank of America Global Research discusses EUR/USD outlook and adopts a core bearish view into year-end.

"Until the ECB Strategy Review, EURUSD is mainly a USD trade in our view, which to us means it is a US inflation trade. For now, high US inflation and a still dovish Fed keep real US rates highly negative and supports EURUSD. The question is for how long this is sustainable if US inflation proves persistent. After the summer, we will get both the ECB Strategy Review and a clearer picture on US inflation beyond base effects. We expect both to move EURUSD, potentially substantially," BofA notes. 

"We still see the balance of risk to the downside and keep our EURUSD forecasts of 1.15 by year-end, against the consensus forecast of 1.21-we also note that the consensus forecast has been revised downwards from 1.25 earlier in the year," BofA adds. 

Source:
BofA Global Research

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