USD/CHF and EUR/CHF rose to tactical highs. What's next?
Where will EUR/USD head to?
- Morgan Stanley forecasts EUR/USD at 1.16 at the end of March 2020, ahead of a further rise to 1.18 by the end of June 2020. According to the bank, Eurozone growth will pick up as US growth starts to slow. In addition, the euro will be supported by political factors. A 2020 resolution to Brexit should reduce economic uncertainty for the UK and its major trading partners, including the euro area.
- Rabobank reminds, however, that the USD is still the only dominant currency on the global payments system and that the US economy continues to perform well relative to other major countries.” The bank foresees EUR/USD at 1.09 in a three month period and at 1.11 in nine months.
- BNP Paribas is somewhere in the middle. Its analysts think that the Fed will cut its official rate twice in the first half of 2020 in reaction to a slowing economy, moderate inflation, and high uncertainty. At the same time, the ECB will also keep the accommodative policy and this won’t let the euro strengthen much against the USD. As a result, there will be little change in EUR/USD even though the euro’s fair value is quite higher than current pricing.
Eurozone, France, and Germany will publish the flash services and manufacturing PMIs on February 19, from 10:15 to 11:00 MT time
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The European Central Bank publishes its monetary policy statement that includes an announcement of the interest rate on March 11, at 14:45 MT time.