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23 Jan 2015
EUR/USD might move towards 1.05 by end-2016 – BAML
FXStreet (Barcelona) - The Research Team at Bank of America-Merill Lynch, revise their forecast for EUR/USD, now forecasting the pair to head towards 1.05 levels by end-2016.
Key Quotes
“Following the aggressive ECB action, we are marking-to-market our projections, keeping a weakening EUR/USD path. We are now projecting EUR/USD at 1.10 by the end of 2015 and 1.05 by the end of 2016, a change from 1.20 and 1.15, respectively, before.”
“We still see a gradual weakening of the Euro, as Fed and ECB monetary policies diverge. After this week’s ECB policy announcements, we do not expect any aggressive further steps for the rest of the year.”
“Our US economists expect the Fed to start hiking rates in September, with risks that the Fed may start later. Such a divergence of monetary policies should continue to weigh on EUR/USD in the medium and long term, but it will have to be faster than markets currently expect to lead to a further substantial weakening of the Euro in the short term.”
Key Quotes
“Following the aggressive ECB action, we are marking-to-market our projections, keeping a weakening EUR/USD path. We are now projecting EUR/USD at 1.10 by the end of 2015 and 1.05 by the end of 2016, a change from 1.20 and 1.15, respectively, before.”
“We still see a gradual weakening of the Euro, as Fed and ECB monetary policies diverge. After this week’s ECB policy announcements, we do not expect any aggressive further steps for the rest of the year.”
“Our US economists expect the Fed to start hiking rates in September, with risks that the Fed may start later. Such a divergence of monetary policies should continue to weigh on EUR/USD in the medium and long term, but it will have to be faster than markets currently expect to lead to a further substantial weakening of the Euro in the short term.”