EURUSD Boundaries Set By Central Banks

UBS expects EURUSD to trade around 1.16 in the short term, supported by a hawkish ECB and robust US data. They anticipate a move toward 1.20 later in the year as structural USD headwinds surface.

Key Takeaways

• 1.We expect EURUSD to trade around 1.16 in the short term with downside risks, before potentially moving to 1.20 as structural USD headwinds re-emerge later in the year.
• 2.The ECB's hawkish stance provides support to the euro despite a slowing growth outlook, while strong US domestic data and a hawkish Fed sustain the USD.

Table of Contents

• ECB hawkishness supports the euro, despite soft economic activity
• US domestic strength offset fading external tailwinds
• CIO Forecast- EURUSD
• Investment Considerations

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