Deutsche Bank with updated EUR/USD review: target at 1.02 by Q3-end

Deutsche Bank with updated EUR/USD review: target at 1.02 by Q3-end

30 July 2015, 06:11
Sergey Golubev
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The Deutsche Bank updated their view on EUR/USD summarized all the factors and made a conclusion about target EUR/USD at 1.02 by Q3-end:

  • "The European outflow story remains fully on track. We continue to see European outflows as part of a multi-year shift in portfolio allocation behaviour towards foreign assets."
  • "The most important is the Fed's re-investment policy on QE assets, because decisions here will determine the prospect of what would essentially be QT, or quantitative tightening: nearly half a trillion dollars matures in 2016, almost equivalent to a full QE program in reverse."
  • "Irrespective of lift-off, the key point then is that Fed tightening is multi-dimensional and likely to steadily reinforce a persistent shift away from the dollar as the world's major funding currency."

"In sum, we remain bearish EUR/USD and after a Q2 lull accompanied by much lighter investor positioning we expect expect the weakening trend to resume," DB concludes.

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