Analysts at CIBC, level out tha the euro ought to maintain up nicely, however will not be the perfect to guess for positive aspects in opposition to the US greenback. They forecast EUR/USD at 1.18 by the tip of the primary quarter.
“Regardless of the ECB pledging to analyse all coverage choices out there, it appears almost certainly that the December ECB assembly will see the financial institution nonetheless utilizing the 2020 ECB playbook. That suggests a rise in measurement and extension in period of the emergency bond programme (PEPP). Credit score and funding points will probably be met by way of an adjustment to the focused long-term refinancing operations (TLTROs).”
“Whereas further ECB easing is essentially discounted we now have seen actual cash and leveraged buyers paring again lengthy EUR positions, albeit from all-time highs in late August. A slower progress backdrop, simpler financial coverage, and political considerations are set to weigh on EUR efficiency. The mix of things means that whereas we anticipate the EUR to carry up in opposition to the USD, it could wrestle versus currencies extra instantly danger and progress correlated in 2021.”