USD could remain stronger for longer – Rabobank

Even though there are signs that the Fed may be having some success in slowing demand in the US, economists at Rabobank expect safe-haven demand to keep the USD underpinned in the months ahead.

EUR/USD to see another move towards 1.03 

“Even though we see risk that the Fed’s determination to win back its inflation-fighting credibility will sink the US economy into recession next year, we expect the USD to find support.”

“It is likely that any sense of crisis is likely to boost demand for the USD, even if a trigger for a deterioration in market sentiment were to stem from a worsening in US fundamentals.” 

“Reflecting the fragile nature of market sentiment, we expect high levels of volatility in FX market in the coming months. We expect bouts of USD selling to be short-lived and continue to see risk of another move towards EUR/USD 1.03 on a 1 to 3-month view.”