According to Rabobank analysts, the EUR/USD pair may have reached its peak and could potentially experience a decline towards the 1.06 level in the coming months.
The analysts state that the Eurozone economy is expected to stagnate in the latter half of 2023, and with the European Central Bank (ECB) having already priced in further rate hikes, there may not be sufficient reasons to buy the EUR. Therefore, in their opinion, the EUR/USD pair may be at its peak.
Furthermore, if there is an expansion in financial sector stress, there is a likelihood of a safe-haven bid for the US dollar. Additionally, due to widespread concerns about a US recession and Eurozone stagnation in the latter half of 2023, as well as evidence of a patchy post-pandemic recovery in China, the USD is expected to receive support from risk aversion. As a result, Rabobank sees a possibility of dips as low as EUR/USD1.06 in the second half of the year.
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