Home Forex USD to remain strong in the near future – Danske Bank

USD to remain strong in the near future – Danske Bank

by SuperiorInvest


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The American dollar (USD) has clearly been better so far this year. Economists at Danske Bank insist on their strategic argument for lower EUR/USD in the medium term.

Robust US fundamentals to further support the USD

We maintain a strategic case for a lower EUR/USD based on relative exchange rates, real rates and relative unit labor costs. We therefore expect a downward trajectory during the year. We will be happy to sell the cross at a rally in the near future.

Although our forecast for the Fed and ECB suggests a pro-inflationary risk for EUR/USD in 1H, we highlight that the broader market price in the G10, which we believe is too aggressive to cut, could prove more important for EUR/USD .

Barring a significant reversal in US data, we expect the USD to remain strong in the near term.

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