EUR/USD to edge towards 1.06 on a three-month view – Rabobank

EUR/USD has given back some of the gains made late Tuesday. Economists at Rabobank analyze the pair’s outlook.

USD to hold firm into the start of next year

Given that the market is continuing to adapt to the view that Fed rates are set to be higher for longer, we continue to see scope for EUR/USD to edge towards 1.06 on a three-month view.

The weaker outlook for both Chinese and European growth should weigh on risk appetite and underpin the safe haven Greenback. 

We expect the USD to hold firm into the start of next year and only soften as expectations for Fed rate cuts start to come into view.