Delta related restrictions may continue throughout winter. These worries are set to underpin the US dollar despite the Fed may refrain from hinting at tapering, economists at Rabobank report.
See – EUR/USD: Year-end forecast stands at 1.18 – ABN Amro
Delta variant to have a worrying impact in many countries
“As the winter approaches may policymakers in various countries are wary that some increase in covid related restrictions may still be necessary despite the growing vaccination rates.”
“Fed hawk Kaplan last week indicated that a rise in Delta cases could make him rethink the timing of his support for tapering. While this would be a USD negative factor on one hand, delta worries may simultaneously increase the safe-haven appeal for the USD.”
“On balance, while pullbacks are likely to be par for the course, we see scope for EUR/USD to head towards 1.16 on a six-month view.”
