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We see risk that EUR/USD could retreat towards 1.12 on a 3 to 6 mth view – Rabobank

“This week’s growth revisions have underpinned the downside risk to global activity this year,” points out Rabobank’s Senior FX Strategist Jane Foley.

Key quotes

“Although risky assets have had a good start to the year on the back of the more dovish outlook of the Federal Reserve and (potentially misplaced) optimism regarding a US-China trade deal, slowing global growth is not conducive with strengthening risk appetite.”

“In our view risk aversion is set to rise this year and in this environment the USD is likely to perform well against a broad basket of ‘risky’ currencies including many from the EM universe in addition to the AUD and the NZD. We see risk that EUR/USD could retreat towards 1.12 on a 3 to 6 mth view mostly on the back of EUR weakness.”

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