Rabobank analysts are expecting EUR/USD to 'lurch lower' in coming months but have been reluctant to forecast parity due to the continuing to "display significant resilience".
- likely that a large part of the resilience has been drawn from the view that the ECB would be cautious in cutting interest rates ... (but) this view is changing
- Rabo’s central view is that the ECB will stick to 25 bps rate cut increments
On the other side of the EUR/USD pair:
- continued resilience of the US economy has led to the market paring back its expectation regarding the pace of Fed rate cuts
Rabo says it sees downside risks to its EUR forecasts.
