EUR/USD strength to continue over the coming months – Danske Bank

Analysts from Danske Bank raised their three-month forecast for the EUR/USD pair from 1.15 to 1.16. They consider the US dollar will likely continue to slide over the coming months due to the global recovery and associated repricing of the inflation outlook. 

Key Quotes: 

“EU optimism (fiscal, less so for Brexit) remains and we (still) see upside risk to EUR/USD. Further, the broad USD is likely to continue declining over the coming months due to the global recovery and associated repricing of the inflation outlook. Indeed, European sectors (banks, industry, autos) and the political backdrop will benefit strongly from an improving outlook for nominal growth.”

“We lift forecasts by one figure, while keeping the downward sloping profile due to medium-term issues with European productivity, EU politics and a likely negative turning point for the Chinese credit cycle when looking ahead 6-12M. Notably, 1M and 3M forecasts are lifted from 1.15 to 1.16.”