EUR/USD seen heading to 1.10 in 3-month – Danske Bank

Senior Analyst at Danske Bank Sverre Holbek sees the pair slipping towards the 1.10 area in the near term.

Key Quotes

“The implied probability that the UK is set to vote to leave the EU in betting markets and prediction markets dropped below 30% yesterday. The relief rally supported GBP, EUR, SEK and NOK, the latter helped by a rebound in the price of Brent crude oil above USD50/bl, while the USD declined”.

“EUR/USD settled above 1.13 and while we could see further short-term relief if the UK votes to stay in the EU on Thursday, we still expect the pair to move down to 1.11 on 1M and 1.10 on 3M on relative US growth outperformance and the Federal Reserve hiking rates in September”.

“Regarding the latter, the market is likely to take notice of signals from Janet Yellen in her semi-annual testimony tonight”.