Rabobank raises its forecast for the euro-dollar exchange rate

"For some time now, we have argued that Germany's structural economic problems mean that the country needs a weak exchange rate. The prospect of large budget injections significantly weakens this argument," says Jane Foley, senior currency strategist at Rabobank.

Rabobank has long argued that Germany's structural economic problems mean that the country needs a weak exchange rate. "The prospect of large budget injections significantly weakens this argument," Foley says.

"We have revised our expectations for the euro across the board," she adds.

...The growth, which will continue until the end of the year, may lead to the exchange rate exceeding recent highs and entering the range of 1.10–1.20.

"Germany can further change the economic situation in Europe with its 10-year plan to support crumbling infrastructure...," Foley says.