A snippet from Citi on their outlook for EUR/USD, which is (in brief):
- Out to 3 month forecast: 1.14
- 6-12 month forecast: 1.16
- longer term forecast: 1.20
- Since the good news on the EU recovery fund, Euro denominated risk assets have traded much more robustly, and although the size of the package isn't 'blockbuster', it's certainly a step in the right direction for European policy and growth.
- In essence, EA 'break-up' risk premia has now markedly been reduced and may support EUR over the medium term.
Of course, we still await further on the recovery fund, news of which may not come until mid-July.