EUR: As good as it gets for the Eurozone? - Rabobank

Jane Foley Senior FX Strategist at Rabobank suggests that while they expect the EUR to remain well supported vs. a range of currencies medium-term, there is good reason to expect the pace of additional EUR gains to be slow.

Key Quotes

“Many investors are already long of the single currency meaning that the EUR is now more susceptible to bad news.   We would not rule out a dip below the 1.16 level in the coming weeks if there is further progress on US fiscal reform.  That said, in the absence of a spike higher in US inflation expectations we view the recent move higher in the USD as a correction rather than a reversal.  On balance, we continue to expect EUR/USD to strengthen in the coming months, although we have pushed back our target of 1.20 to a 6 month view from a previous 3 month forecast.”