EUR/USD seen at 1.24 in one month and at 1.16 in a year – Danske

As the near-term direction of EUR/USD remains in the hand of a declining US dollar, explained analysts at Danske Bank. They lift their one-month forecast to 1.24 and they see EUR/USD at 1.16 in twelve months.

Key Quotes: 

“The near-term direction of EUR/USD remains in the hand of a declining USD versus all crosses and we lift our 1M forecast to 1.24 to reflect this. Among other things, we see the drivers as (1) rising Brexit deal expectations, (2) additional fiscal easing in the US seeming likely and (3) vaccines seeming to be well on track to improving the global situation.”

“Looking ahead, the key tailwind from Chinese easing is fading as we go in to Q1, the European recovery remains two-paced and the US is likely more resilient towards a Chinese slowing. Hence, we continue to see EUR/USD as moving lower next year, mostly in H2. We thus keep 1.16 in 12M. Do note the large discrepancy between our view and the consensus.”