ING Research discusses EUR/USD outlook and maintains a bearish bias targeting a move towards 0.95 by year-end.
"EUR/USD is now around 5% off its late September lows. What has driven it?...What probably is making the difference are equity markets. Since early October, European equity benchmarks are up 11% versus the 5-6% recovery in their US equivalents. Some bottom-fishing in European assets markets (including FX) may be at work here. We would argue that both the Fed and the ECB intend to take real rates even higher to turn the inflation trajectory around - meaning that further equity gains remain challenging," ING notes.
"Above 1.0090/1.0100 EUR/USD could briefly see 1.02, but we would be in the camp saying that this correction does not endure and would still favour a return towards 0.95 into year-end," ING adds.