EUR/USD can sink further in the coming weeks – Rabobank

EUR/USD has today sunk to its lowest levels since mid-March. Economists at Rabobank discuss the pair’s outlook for the coming weeks.

USD is likely to find support amid risk-averse environment

“The currency pair is comfortably on course for hitting our H2 target of EUR/USD 1.06.” 

“The market is already comfortably priced for further rate hikes and moderating price data and the threat that the Eurozone is facing stagnation in H2 suggest that the EUR can sink further vs. the USD in the coming weeks.”

“The risk that the US may fall in recession this year, combined with a disappointing recovery in China and stagnation risks in the Eurozone do not bode well for risk appetite. In this environment the USD is likely to find support.”