Our scenario analysis based on four macro & political themes on what's next for EUR/USD - download it below
EUR/USD has confounded consensus expectations this year, hit by both intermittent episodes of USD strength and EUR weakness. Of the many factors that will drive EUR/USD over the next 12-18 months, four stand out:
(i) Trade wars;
(ii) European politics;
(iii) the relative ECB/Fed policy outlook; and
(iv) the relative EZ-US growth (and equity) prospects.
Here we outline our baseline and alternative assumptions for these inputs – and our corresponding baseline and alternative EUR/USD profiles.