Danske Forecast For Eurusd

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Danske Forecast For Eurusd

Danske Forecasts Eur/Usd To Touch 1.20

The EUR/USD pair has gone through a roller coaster ride in the last few years. After hitting 1.150 (3Y year), the pair has since retreated to near 1.12.

According to the Danske Bank, the markets have lost their confidence in the US economy. Also, the capital markets of the USA show a loss of confidence as well.

Eur/Usd To Turn Bullish During 12-Months

This means a net gain for the EUR/USD. That's why the Danske Bank has forecasted the EUR/USD to rise towards 1.20 in the next 12 months.

The bank added that the undoing of the US-China tariffs has also improved the risk appetite. However, this development has also halted the US dollar recovery.

In the near term, the short USD positions and the easing of tensions will help the currency in the short term. However, they expect that the currency will go into a consolidation phase as compared to US Dollar gains.

Going forward, the US Federal Reserve will go ahead with more rate cuts during the rest of 2025. When coupled with a weak US economy, it becomes clear that the US Dollar will be the obvious loser.

However, the rate cuts by the Federal Reserve will be offset by the rate cuts from the European Central Bank.

In the next few quarters, the Danske Bank believes that the traders will move funds out of the USA assets and put them somewhere else. Also, the trade uncertainty will remain a key theme which also supports a weaker US Dollar.

Meanwhile, the Euro will gain because of the fiscal policy and the political shifts in the region. Also, the actions by the ECB will improve the growth outlook of the Eurozone.

With all things considered, the bank has issued a forecast of 1.20 for the EUR/USD pair. But If the US economy shows resilience, it could put a limit to the Euro gains.

But if the recession fears in the USA turn into a reality, it would lead to even bigger gains in the EUR/USD. In that case, the EUR/USD could rise towards 1.22 and 1.25.

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