EUR/USD eyes 1.10 in 3-month – Rabobank

By FXStreet In opinion of Jane Foley, Senior FX Strategist at Rabobank, the pair could slip towards 1.10 in a 3-month horizon.

Key Quotes

“The Federal Reserve’s April 27 policy meeting was less dovish than in March. However, the implied probability of a rate hike in June fell in the sessions that followed the April FOMC, with the market betting that a Fed rate hike looks unlikely until after the US November election”.

“The softening in US Q1 GDP growth is in part responsible for the market’s dovish assumptions on Fed policy. That said, the Fed has maintained a constructive outlook on domestic demand and many economists are predicting that the pace of US growth will pick up in Q2”.

“It is our expectation that a Fed rate hike is likely in June and with the market not positioned for such an event, there is risk that the USD could break higher in the coming months”.

“Given also the risk that the ECB may move its discount rate further into negative territory we expect EUR/USD to move towards 1.10 on a 3 month view”.
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Source:: FX Street