December 5, 2022

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In a tight range for now; staying core bearish for 1.15

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Bank of American on the euro

Bank of American on the euro

Bank of America Global Research discusses EUR/USD outlook and sees the pair staying in a tight range in the near-term, while maintaining a year-end target at 1.15.

“Assuming risk assets remain supported, last week we argued that such
monetary policy divergence is positive for the commodity currencies
against the relative safe havens. We see EURUSD in a tight range
for now, with US inflation and the ECB Strategy Review the main drivers
for the rest of the year. We remain bearish EURUSD in our end-year
forecast, subject to these risks
,” BofA notes. 

“In the meantime, the USDCNH fixing keeps getting lower. USDCNH is
strongly (negatively) correlated with EURUSD. We have been arguing that
the answer to the USD question may be in China,” BofA adds.

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