EUR/USD to rise during 2016 – Danske Bank

By FXStreet FXStreet (Córdoba) – According to analysts from Danske Bank the EUR/USD pair will head higher during 2016.

Key Quotes:

“We believe EUR/USD will be range trading in the short term, before heading higher in 2016. Our call for a rise in EUR/USD is probably our biggest non-consensus view at the moment and we are getting a lot of push-back on this.”

“However, we believe that markets underestimate what higher inflation and a re-acceleration in euro area growth will do for prospects of ECB policy. Next year could very well be the one where the theme turns from further ECB easing to talking about an exit when we get through the year.”

“While monetary policy is likely to diverge with the Fed increasing rates and the ECB on hold, the impact of this may not be as strong as many believe. Positioning is heavily skewed towards a stronger USD and history suggests that relative rates have less of an impact when this is the case. The bottom line is that we still expect EUR/USD to end 2016 around 1.16 versus the USD.”

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Source:: FX Street