the previous Deutsche Bank forecasts of $1.05 and $0.95 for the EUR/USD
exchange rate for the end 2016 and 2017, respectively, were widely
viewed as ‘aggressive’, the forecast now appears not aggressive enough
according to the latest release.
"While we are not changing these
EUR/USD forecasts, the risks to these projections are skewed toward a
EUR downside overshoot,“ Alan Ruskin, a strategist at Deutsche Bank
Securities, wrote in a research note on Thursday.
of the recent US and European political developments combined with the
US policy cycle is creating a market environment of what the Deutsche
Bank analyst called a ‘perfect storm’ with persistently elevated FX
"We are keeping our long standing call for EUR/USD to
slide below parity and leave our 2017 year-end forecast at $0.95,“
Ruskin wrote in a research note on Thursday.
“We also await
details on the Trump stimulus, and the extent to which the growth
impulse falls in 2018 and beyond, before we make any changes to our main
2018 and 2019 forecasts. For now our forecasts are based on the USD
upswing being fairly close in length to the early 1980s and late 1990s,
though the risks are that this cycle gets extended beyond past cycles,”
Ruskin further noted.
EUR/USD today’s Exchange Rate is 1.0596.
EUR/USD is going up and is recommended to buy.
We are feeling increasingly confident that EUR/USD will break out of its 1.05- 1.15 range and trade through parity next year.
First, it is high time EURUSD started to move again. The duration of the current lack of trend is approaching a record high.
Second, the dollar is approaching its sweet spot for a late-cycle rally.
Big dollar moves are less dependent on the change in short-end yields
but on the absolute level: whenever the dollar becomes a top-3 G10
high-yielder it rallies as yield-seeking inflows return. A Fed rate hike
this December will make the dollar the third highest yielding currency
in the world, a strong dollar positive.