EUR/USD has slumped to its weakest level since July 2020 at 1.1524. Economists at Danske Bank lower their profile for EUR/USD to 1.10 in 12 months (from 1.13) as a reflection of broader market themes increasingly turning pro-dollar.
‘Stagflation’ is a perfect storm for EUR at current levels
“We lower our EUR/USD forecast, from 1.13 to 1.10 in 12M and similarly over time. This reflects our view that market themes are increasingly pro dollar.”
“The manufacturing cycle is clearly slowing but central banks need to tighten to catch-up with inflation pressures and this is quite negative for EUR/USD, especially at current levels around 1.15-16’s.”
