The firm revises its 3-month EUR/USD forecast lower to 1.08 from 1.09
Citing an increase in geopolitical and trade risks on the forecast downgrade. In a note, BMO Capital Markets' European head of FX strategy, Stephen Gallo, adds that:
"Regardless of the way Brexit unfolds, the Eurozone's governance structure looks increasingly unwieldy, and the burden of backstopping the bloc's vulnerabilities is likely to fall squarely on the ECB due to the lack of fiscal maneuverability."
They also see EUR/USD staying around 1.08 in 12-months' time owing to a faster pace of ECB balance sheet expansion next year.
The firm's view is one of the most bearish in terms of EUR/USD forecasts as most other firms view the pair closer to 1.16 by Q2 2020, according to Bloomberg's FX forecast data:
