EUR/USD seen falling towards 1.04 on a 12M horizon – Danske Bank

EUR/USD erased around 50% of its post-Fed gains going into the weekend. Economists at Danske Bank analyze the pair’s outlook.

USD weakness to continue in the near term

We anticipate USD weakness continuing in the near term due to the recent substantial easing of financial conditions, which should lend support to a general risk-on sentiment in markets. Combined with bearish USD year-end seasonality, this could provide some support to EUR/USD in the next months.

Further out, we expect USD to regain strength and see EUR/USD falling towards 1.04 on a 12M horizon.