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- EUR/USD to plunge towards 1.15 in the second quarter as dollar's strength lingers – Credit Suisse
EUR/USD to plunge towards 1.15 in the second quarter as dollar's strength lingers – Credit Suisse
FXStreet reports that economists at Credit Suisse expect the EUR/USD pair to remain in a mild downtrend. Their expected Q2 range is 1.14-1.21.
“At its March meeting, the ECB said it would conduct PEPP asset purchases at a ‘significantly higher pace than during the first months of this year’. This is in line with a clear and explicitly stated intention to suppress yields and resist the upward pressure stemming from the rise in US Treasury yields.”
“We target EUR/USD 1.15 during the quarter, and only see a sustained bounce after EU vaccinations clearly ramp up and/or the European Recovery Fund spending plans impress.”
“Loose monetary conditions, which include a softer EUR, are contributing to both strong equity markets and rising inflation expectations in the euro area. This will encourage the ECB to carry on with its current plan, especially while the underlying economy remains fragile, prone to lockdown risk and lacking a US-style fiscal impulse.”
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