Danske Research maintains a bearish bias on the EUR into year-end and expresses this view via a short exposure in EUR/AUD targeting a move towards 1.30.
"A new round of intervention is here for the energy market and cross-asset moves appear unimpressed by EU/G7. For FX, the interesting feature is that EU countries do in fact largely agree on what is to be done. Therefore, we are not waiting for a 'moment of crisis' to spur a deal. Rather, the political environment is pro-inflationary and we are still some time away from solving the root issues at hand," Danske notes.
"We are sceptical of capping prices, taxing windfall gains and subsidizing consumption. Backstopping margin calls for utilities and keeping open power plants seem like economically backed ideas...We keep our view of seeing EUR/USD at 0.95 in 12m, 0.93 at the end of '23," Danske adds.