Rabobank Sees Euro-Dollar Stuck in Volatile Range Through Months
Rabobank's analysis suggests that the Euro to Dollar exchange rate (EUR/USD) will remain volatile in the coming months, trading around the 1.15-1.16 range. The bank has raised its one-month forecast for EUR/USD to 1.15 from 1.14, but sees little prospect of a clean breakout from the pair's recent range.
The current price action remains contained within a narrow 48-hour range between 1.1514 and 1.1562, with prices hovering around the lower third of that range. The bank notes that EUR/USD has struggled to sustain moves above 1.1550, indicating a dominant range-bound trading environment.
Rabobank attributes this phenomenon to the weakening traditional inverse relationship between oil and the US currency, which has been displaced by interest-rate expectations as the more important driver. With market speculation regarding Fed rate hikes pared back, the bank expects potential downside pressures on the USD.