EUR/USD seen lower around 1.07 in 3-month – Danske Bank

Analysts at Danske Bank have suggested the pair could grind lower towards the 1.07 area in the near term.

Key Quotes

“We are adjusting our EUR/USD forecasts in line with what we communicated before and immediately after Brexit”.

“We now forecast EUR/USD at 1.09 in 1M (1.11 previously), 1.07 (1.10) in 3M, 1.10 (1.14) in 6M and 1.14 (1.18) in 12M”.

“Short-term, we expect increased political uncertainty in the eurozone and the prospects of further monetary easing to weigh on EUR/USD”.

“However, medium-term we continue to expect that the undervaluation of the EUR and the large eurozone-US current account differential will support the EUR”.