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Aug 24 - 06:55 PM

EUR/USD: Around 5% Undervalued But Risk Premium Can Linger For Several Months - ING

By eFXdata  —  Aug 24 - 03:15 PM

ING Research maintains a bearish bias on EUR/USD over the coming weeks.

"Despite yesterday’s rebound, EUR/USD remains undervalued by around 5% according to our short-term fair value model. As we’ve highlighted on multiple occasions lately, the risk premium on the pair can linger for several months as it did in 2015 (Greek debt crisis) and 2018 (Italian political turmoil)," ING notes. 

"In other words, while an improvement in the eurozone’s growth sentiment may trigger an asymmetrical upside reaction in EUR/USD, a prolonged short-term undervaluation is surely possible should gas prices remain elevated and the threat of supply shortages material," ING adds. 

ING Research/Market Commentary


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