EUR/USD: Year-end forecast unchanged at 1.23 - NBF

Analysts at the National Bank of Canada, even though the euro remains saddled by soft economic data and political uncertainty, forecast a bounce in EUR/USD during 2019 and kept their forecast of 1.23 by year-end.

Key Quotes:

“The common currency does not look good right now, saddled by soft economic growth and political uncertainty (including Brexit and Italy). The European Central Bank, which continues to be frustrated by slow GDP growth, low inflation and a fragile banking sector in the eurozone, is unlikely to change its loose stance on monetary policy soon. But at some point investors will come to expect the central bank to start the process of policy normalization. That, coupled with USD weakness and the reversal of large speculative net short positions on the euro, could allow the common currency to bounce back this year.”

“We are leaving unchanged our end-of-2019 forecast of 1.23 for EURUSD.”