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Oct 13 - 06:55 PM

EUR/USD: Stagflation To Take The Spot Lower And Lower; Where To Target? - Danske

By eFXdata  —  Oct 13 - 03:00 PM

Danske Research lowers its EUR/USD forecasts and now targets the spot at 0.97, 0.96, 0.95, and 0.93 in 1-, 3-, 6-, and 12-months.

"We have lowered our forecast profile for EUR/USD and expect the cross at 0.93 in 12M on the back of a substantial negative terms-of-trade shock to Europe vs US, tightening of global financial conditions, broadening USD strength and downside risk to euro area growth," Danske notes. 

"We view fair value for EUR/USD to be in the low 0.90’s. At current levels, valuation is a headwind and thus acts as source of gravity for a lower spot," Danske adds. 

Source:
Danske Research/Market Commentary

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