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- EUR/USD to tank towards 1.05 amid rising recession risk – Danske Bank
EUR/USD to tank towards 1.05 amid rising recession risk – Danske Bank
Economists at Danske Bank keep theirr current forecast on EUR/USD unchanged at 1.05 in 12 months. They see policymakers increasingly committed to curtailing global inflation by tightening financial conditions despite global manufacturing slowing.
Key risk to shift EUR/USD towards 1.20 is seeing global inflation pressures fade and industrial production increase
“We keep our EUR/USD forecast largely unchanged. Global manufacturing is slowing, valuations shows risks are to the downside for spot and the near-term consequences of the war in Ukraine will likely be a further strengthening of the USD. We thus continue to expect EUR/USD can drop further in this environment.”
“The key risk to shift EUR/USD towards 1.20 is seeing global inflation pressures fade and industrial production increase. However, ‘transitory’ has substantially lost credibility and European industrial production continues to be weak. This will continue in coming months. The upside risk also include a renewed focus on easing Chinese credit policy and a global capex uptick and the latter two have increased in probability over recent weeks.”
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