EUR/USD is set to stay rangebound for now – Danske Bank

For EUR/USD, with neither the ECB nor the Fed in a hurry to signal a faster tightening pace, a key issue near term remains whether the US will escalate the trade war rhetoric further, explains Christin Tuxen, Chief Analyst at Danske Bank.

Key Quotes

“In our base case that barriers are limited to very specific area, EUR/USD is set to stay rangebound for now. Our medium-term story remains unchanged: a turn in the capital tide from USD to EUR is brewing as the relative attractiveness of EU vs US assets is on the rise. We have kept our forecast profile unchanged and thus continue to see EUR/USD at 1.23 in 3M, 1.25 in 6M, and 1.28 in 12M; we see at 1.23 in 1M with the pair set to stay in the 1.21-1.26 range.”