EUR/USD: A recovery to 1.10 is possible in the medium term – Commerzbank

Economists at Commerzbank update their EUR/USD forecasts. The pair is expected to remain under pressure in the near term before rising to the 1.10 target.

Levels in the 1.06 range should be appropriate in the short term

“In the short term, EUR/USD levels in the 1.06 range seem appropriate to us.”

“EUR/USD levels around 1.10 have not (yet) proven sustainable. They are only likely to become so when Fed rate cuts become more foreseeable and, at the same time, the ECB sticks to its peak interest rate level.” 

“We continue to expect rising EUR/USD rates in the second half of the year, but have postponed the price target (around 1.10, i.e. at the recent EUR/USD highs) to early 2024.”

“In the long term, we admittedly remain EUR skeptical due to skepticism regarding material ECB independence.”

Source: Commerzbank Research