From NAB
NAB FX Strategy Research maintains holding a bullish EUR view following Emmanuel Macron's victory in the French elections, expecting further EUR/USD gains over the coming weeks and months.
In that regard, NAB argues that while the real challenge for Macron will be his ability to break the mould and make France and the euro project work for the many, this won't be an issue that will drive the EUR in the short-term given the optimism that Macron's new platform can bring.
For the ECB, NAB argues that the removal of tail risks clears the way for the June meeting to slightly alter its guidance via removal of the words 'or lower' from the pledge to have unchanged or lower rates for the foreseeable future.
Strategy-wise, NAB see any EUR's setbacks from here to prove temporary, arguing that EUR/USD close to current levels is just about holding onto the bottom of what NAB considers to be the likely new range of 1.0850-1.1700 for the coming 18 months or so.
"Our base case remains 'keep the faith'; believing a break higher is coming and we retain our 1.10 end-June forecast with higher levels thereafter," NAB argues.
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