EUR/USD to drop back below parity over the coming months – Danske Bank

EUR/USD extends its sideways grind near 1.0200 into the third straight day on Wednesday. Looking ahead, tighter monetary policy and the lingering global energy crunch render economists at Danske Bank confident in their call for EUR/USD to drop back below parity. 

EUR/USD seen at 0.95 in 12 months

“Besides tighter monetary policy, the USD feeds off the positive energy terms of a trade shock to the US economy.”

“As the heating season begins in a couple of months, US LNG exporters sit on the winning end of Russia’s threat to shut down natural gas exports to the EU. Consequently, we are confident in our call for EUR/USD to drop back below parity over the coming months.” 

“We forecast EUR/USD at 0.95 in 12M.”