Danske Research discusses its revised forecast for EUR/USD
"We revise down our EUR/USD forecast in 12M from 1.08 to 1.05. Global manufacturing is slowing, valuations shows risks are to the downside for spot and the near-term consequences of the war in Ukraine will likely be a further strengthening of the USD. We thus continue to expect EUR/USD can drop further in this environment," Danske notes.
"The key risk to shift EUR/USD towards 1.20 is seeing global inflation pressures fade and industrial production increase. However, ‘transitory’ has substantially lost credibility and European industrial production continues to be weak. This will continue in coming months. The upside risk also include a renewed focus on easing Chinese credit policy and a global capex uptick and the latter two have increased in probability over recent weeks," Danske adds.